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SSP, an operator of food and beverage outlets in travel locations, is in the midst of a restructuring plan with the aim of creating £30mn in annualised savings.
Management also reiterated its target of £100mn in free cash flow for full-year 2026, a realistic enough ambition given that it achieved a positive free cash flow of £80mn over its last financial year.
None of this really amounts to remedial action, but SSP is focused on driving shareholder value as the group continues to trade at levels well below those seen before the pandemic. A £100mn share buyback initiated in October has done little to buoy sentiment, at least judging by share price performance.
The group, an operator of food and beverage outlets in travel locations, was hit hard by the pandemic, suffering a massive decline in sales due to the widespread collapse of domestic and global travel. As with some other companies, it also saw a marked increase in net debt as a proportion of the asset base.
SSP wasn’t the only listed entity whose trading volumes fell off a cliff due to the lockdown provisions, but it probably took longer than expected for footfall to recover at its various sites at home and across the globe. But the group’s share price has retraced to a degree since publication of its preliminary figures, leaving the shares trading in line with peers at a median multiple of 3.43 times on an enterprise/cash profit basis.
Subsequent to the latest preliminary release, a handful of board members signalled their support through a series of share purchases, including an aggregate outlay of £325,162 by SSP’s chief executive Patrick Coveney and its finance chief Geert Verellen.
