SSP chief shows appetite for shares

SSP (SSPG) has been buffeted this way and that by the pandemic. Much of the food and drink outlet operator’s estate is at commuting points such as train stations and airports, which was hardly conducive to success during periods of domestic and international travel restrictions.

The owner of the Upper Crust brand’s latest interim results, released on 24 May and covering the half-year to 31 March, showed signs of progress. Revenue of over £800mn was at64 per cent of pre-pandemic financial year2019 levels and the business returned to profit. 

There was better news yet for the top line in post-period trading. Revenue for the first six weeks of the second six months of the financial year was at 83 per cent of 2019 levels. The company forecasts that revenue for the second half will come in at around 80-85 per cent against 2019, and it expects to return to 2019 revenue and margin levels by 2024. 

Investors liked what they saw, with the company’s shares boosted on results day. They are up by almost 9 per cent since the announcement. Chief executive Patrick Coveney was clearly happy with the share movement – SSP disclosed that he bought £1.6mn-worth of shares on the same day as the results release at £2.55 a share. 

Numis has the shares trading on 30 times forward financial year 2023 earnings, which it expects to fall to 20 times the following year. The broker said that SSP’s fourth quarter “is the most important from a seasonal perspective, which may have a disproportionate impact on margin recovery” and dubbed its revenue forecast for the second half as “cautious” given recent performance.