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Wed 23rd Sep 2020 - SSP reports sales still 76% below last year
SSP reports sales still 76% below last year: Transport hub foodservice company SSP Group has reported current weekly sales are running at approximately 76% below last year, representing an improvement from the third quarter when sales were approximately 95% lower in April and May and 90% lower in June. The company stated: “The sales improvement has been driven by a stronger recovery in Continental Europe, where weekly sales are approximately 66% lower year-on-year, compared with the UK, North America and the rest of the world, where weekly sales remain around 80-85% lower year-on-year. Across the group, we have now re-opened just over a third, approximately 1,100, of our units, which is ahead of the expectations we set at the Interim results in June. Our approach to unit openings continues to be systematic, with units and sites only being opened selectively and where they will achieve break-even levels of sales, even at low levels of passenger activity. Sales in Continental Europe have benefitted from the stronger performance of the rail business, notably in Germany and France, and some recovery in regional air travel over the summer.” Simon Smith, chief executive of SSP Group said: “Covid-19 continues to have an unprecedented impact on the travel industry and on SSP’s businesses in all geographies. Our first priority throughout this crisis has been the health, safety and welfare of our people and our customers. We have taken rapid and decisive action to reduce cost, preserve cash and to substantially strengthen the group’s financial position. It is with regret that the prolonged nature of this crisis has resulted in us having to restructure and make considerable job losses in order to protect the business. These are always extremely difficult decisions, and we are supporting our colleagues throughout this process. We have seen some improvement in passenger demand since the start of the crisis and we have reopened units swiftly and profitably in response to this, with over one third of our units now trading. Our model is flexible and we will continue to align unit openings with demand, meeting the needs of our customers whilst managing operating costs and cash flow tightly. In the medium-term we expect to see the gradual return of passenger travel to more normalised levels. The actions we are taking to rebuild the business will enable us to emerge fitter and stronger, positioning us to capitalise on future opportunities and delivering long term sustainable growth for the benefit of all our stakeholders.” The company added: “Overall sales in the second half of the year are expected to be approximately 86% lower year-on-year, resulting in a reduction in revenue of around £1.3bn compared to H2 2019. Encouragingly, the extensive management action to reduce the cost base, notably rent, overhead and labour, means that despite the weaker sales the underlying Ebitda and operating loss (on an IAS 17 basis) are expected to fall broadly in the middle of the ranges set out in the Interim results in June (-£120m to £190m Ebitda and -£180m to £250m operating loss) for the second half of the year. Whilst the decision to implement redundancies across the group is extremely regrettable, it has been a necessary step to protect the business and preserve cash in the near term. Overall net cash usage in H2 is expected to be in the region of £250m to £270m, a considerably better outcome than that anticipated at the Interim results in June of £340m to £440m. This performance reflects tight management of working capital, including agreed rent waivers and deferrals with many of our clients, reduced capital expenditure, as well as the benefit of government support schemes and the recovery of previously paid corporation taxes in a number of countries. We were also able to retain some of the cash related to the declared final dividend for 2019, through the placing of new shares. Throughout this crisis, our focus has been and continues to be the health and safety of our people and our customers. SSP has taken decisive and significant action to protect the business and reduce costs. Proactive liquidity management has enabled us to keep our cash usage to a minimum during this period. More recently, we have seen some limited improvement in traffic in a number of regions, with sales currently at around 24% of pre- covid levels. As we head into the winter months, demand may well remain subdued. However, we have an important role, providing food and beverage services to the travelling public, and we will continue to re-open units dynamically where we see demand, maximising the profitability of the reopening programme and rigorously controlling costs and cash. Looking further out, we firmly believe that demand for travel will return and the actions we have taken since February, together with the evolving market backdrop, will ensure SSP emerges as a fitter, stronger leader in the sector.”

Ten Entertainment Group reports trading at 83% of previous levels since easing of lockdown: Ten Entertainment Group, the operator of 46 family entertainment centres, has reported trading has begun well at 83% of previous levels since the easing of lockdown. The company reported a strong start in the first quarter with accelerating like-for-like sales growth of 9.6% before lockdown. Cost control, supplier support and government support reduced cash burn by over 70% I lockdown, it reported. Nick Basing, executive chairman said: “I am pleased that even in extreme adversity the team have taken decisive action that has enabled the group to emerge from Lockdown so strongly, putting in place sufficient cash liquidity to protect it through a continued period of uncertainty. We have made a very good start, showing that we have a safe and attractive business for customers and staff. I fully expect our strategy for growth, proven over the years, to return us to profitable growth in the near future once circumstances permit.” Chief executive Graham Blackwell added: “I am pleased to have been given the opportunity to lead the group at this crucial time and I am grateful for the fantastic support from my colleagues as we have secured our long-term position. My 30 years in the business have shown me that the strength and stability of our teams, the quality of our estate and our great service can stand the test of time. We are really encouraged by our reopening performance. Our primary focus is to return the business to the trend of the first quarter through our strengths in operational improvements and commercial innovation. Our proven strategy remains relevant, and with a track record of eight consecutive years of like-for-like sales progression, I am confident that we will return the business to growth.” The company reported turnover of £22.5m in the 26 weeks to 28 June (2019: £41.4m) and a loss of £5.7m (2019: profit of £7.3m). 

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