Upper Crust owner gets travel recovery boost, but inflation a worry

A male donning a protecting mask walks previous an Upper Crust at Victoria Station in London, Britain July 1, 2020. REUTERS/Hannah Mckay

  • SSP expects total-calendar year income at higher conclusion of outlook vary
  • Flags inflationary pressures
  • Shares down 5%

July 14 (Reuters) – British snack chain firm SSP (SSPG.L) claimed on Thursday a swift recovery in vacation intended annual profits and revenue margins would be at the higher close of its forecasts, while it warned expense pressures and provide chain snags would persist into future 12 months.

Shares in the proprietor of the Higher Crust chain observed mainly in airports and practice stations fell above 5% in early trade.

There has been pent-up demand from customers for summer vacation considering the fact that pandemic restrictions have been lifted in numerous nations, major to disruptions at airports and lengthier wait around periods for travellers.

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But SSP is also facing sky large costs and inflationary pressures as well as reduced purchaser investing amid a cost-of-living crunch. read more

“We are effectively-positioned to advantage from the ongoing recovery of the vacation sector, notwithstanding the latest issues of airport disruption, labour shortages and industrial motion across certain air and rail marketplaces,” SSP reported in a statement.

SSP expects annual profits to be at the upper conclude of its 2 billion to 2.1 billion kilos ($2.5 billion) forecast range, and core income margins of all-around 6%.

“We see vacation concession operators as a way to participate in the recovery in journey with no the money risk or ESG challenges of investing straight in transportation belongings like airways,” Stifel analyst explained, referring to environmental, social and governance difficulties.

SSP stated solid restoration in air travel had boosted its United kingdom income, but rail functions have been dented by strikes that introduced the community close to a standstill above a number of days very last month.

British rail and transport personnel this week voted for strike motion in a dispute in excess of shell out, threatening extra disruption.

SSP reported team revenues averaged 72% of its 2019 pre-COVID-19 levels for the 9 months to June 30.

The London-listed company, which operates in 36 nations around the world, explained it was self-assured it could mitigate the influence of the pressures by raising costs and productiveness.

($1 = .8435 pounds)

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Reporting by Muhammed Husain in Bengaluru
Enhancing by Sherry Jacob-Phillips and Mark Potter

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