Upper Crust owner's sales on the rise as UK commuters return to the office

FILE PHOTO: A man wearing a protective mask walks past an Upper Crust at Victoria Station in London, Britain July 1, 2020. REUTERS/Hannah Mckay
  • Sales rising after lifting of coronavirus curbs in UK, Europe
  • Highlights underlying core profit in Q1 2022
  • Shares up about 3%

Feb 4 (Reuters) - Britain's SSP (SSPG.L), owner of Upper Crust and other catering brands, said on Friday that sales were recovering as people were commuting by train to work again after coronavirus curbs hit travel and slowed growth at its airport and rail station outlets.

SSP, which also runs Burger King and Jamie Oliver chains in travel locations, said its sales in the latest eight weeks to Jan. 30 were at around 57% of 2019 levels, just before the pandemic hit Europe. However, they were down from the nine weeks before that when sales ran at 66% above 2019 levels.

The recent uptick in sales, following the lifting of restrictions in the UK and some European markets, was driven mainly by a rise in the number of rail passengers.

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Shares in the London-listed firm, which operates in 36 countries, were up nearly 3% by 0925 GMT after it also said it made an underlying core profit in the first quarter to December, while net cashflow was broadly neutral.

Analysts said SSP was well placed to expand and take market share, while restoring margins, as leisure travel could recover fully even as business travel remains uncertain.

"The range of potential recovery outcomes seems very wide at this stage, which SSP now has the balance sheet to contend with," Stifel analyst Mark Irvine-Fortescue said in a note.

SSP raised 450 million pounds ($610.65 million) in a rights issue last April to see itself through the crisis. This month, it fully repaid 300 million pound in COVID-19 government financing, leaving it with 630 million pounds of available liquidity.

The turnaround at SSP follows a lengthy period of making losses in the wake of the pandemic. The company returned to profit in the fourth quarter ending September 2021.

SSP still expects its revenue and profit margins to broadly return to 2019 levels by 2024.

($1 = 0.7367 pounds)

($1 = 0.7369 pounds)

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Reporting by Muhammed Husain in Bengaluru; Editing by Subhranshu Sahu and Susan Fenton

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