- The pandemic dented sales in 2020, as footfall plunged at airports and train stations
- Travel might pick up next year, but pressures on the balance sheet will stick
Even as merrymakers prepare to travel around the nation in government-approved Christmas periods, Upper Crust owner SSP (SSPG) is not upbeat about its prospects for the quarter ending in December. The sandwich maker, whose shops are concentrated in airports and train stations, still expects that revenues will be 80 per cent lower compared with last year. The group sunk to an operating loss of £364m in FY2020.
But SSP is hopeful that the roll out of Covid-19 vaccination programmes will help to stimulate a recovery in travel in the second half of next year. In the meantime, however, the company still has to deal with a mountain of net debt, which has grown by over £200m to £692m, if you exclude more than £1bn-worth of lease liabilities. Management has secured waivers for the group’s existing covenant tests until March 2022, but 2020 will weigh on the balance sheet for some time. Sell at 314p.
Last IC view: Sell, 248p, 1 Jul 2020
| SSP (SSPG) | ||||
| ORD PRICE: | 314p | MARKET VALUE: | £1.69bn | |
| TOUCH: | 314-315p | 12-MONTH HIGH: | 694p | LOW: 137p |
| DIVIDEND YIELD: | NIL | PE RATIO: | na | |
| NET ASSET VALUE: | 24p* | NET DEBT: | £2.04bn | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 1.99 | 106 | 16.0 | 5.7 |
| 2017 | 2.38 | 145 | 20.5 | 8.5 |
| 2018 | 2.56 | 183 | 24.9 | 10.2 |
| 2019 | 2.79 | 197 | 28.1 | 11.8 |
| 2020 | 1.43 | -426 | -76.1 | nil |
| % change | -49 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £731m, or 136p a share | ||||
