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

A male carrying a protective mask walks past an Upper Crust at Victoria Station in London, Britain July 1, 2020. REUTERS/Hannah Mckay

July 14 (Reuters) – British snack chain firm SSP (SSPG.L) reported on Thursday a rapid recovery in vacation intended annual product sales and revenue margins would be at the upper conclusion of its forecasts, though it warned expense pressures and supply chain snags would persist into next yr.

Shares in the owner of the Upper Crust chain discovered primarily in airports and teach stations fell above 5% in early trade.

There has been pent-up demand for summer months journey since pandemic limits were being lifted in quite a few international locations, top to disruptions at airports and for a longer time hold out instances for travellers.

But SSP is also experiencing sky superior prices and inflationary pressures as nicely as lower purchaser spending amid a price tag-of-dwelling crunch. read extra

“We are nicely-positioned to profit from the continued recovery of the travel sector, notwithstanding the existing worries of airport disruption, labour shortages and industrial action throughout certain air and rail markets,” SSP explained in a assertion.

SSP expects annual sales to be at the upper conclude of its 2 billion to 2.1 billion lbs ($2.5 billion) forecast assortment, and main revenue margins of around 6%.

“We see journey concession operators as a way to perform the restoration in travel without the need of the money hazard or ESG problems of investing specifically in transport assets like airways,” Stifel analyst said, referring to environmental, social and governance issues.

SSP stated sturdy restoration in air vacation experienced boosted its United kingdom product sales, but rail operations were dented by strikes that introduced the network shut to a standstill above many times past thirty day period.

British rail and transport employees this week voted for strike action in a dispute above spend, threatening additional disruption.

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

The London-listed business, which operates in 36 international locations, stated it was assured it could mitigate the impact of the pressures by growing charges and productiveness.

($1 = .8435 lbs)

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

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