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

A male wearing a protecting mask walks earlier an Higher Crust at Victoria Station in London, Britain July 1, 2020. REUTERS/Hannah Mckay

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  • SSP expects full-year profits at higher stop of outlook variety
  • Flags inflationary pressures
  • Shares down 5%

July 14 (Reuters) – British snack chain business SSP (SSPG.L) explained on Thursday a fast recovery in travel meant annual gross sales and profit margins would be at the higher stop of its forecasts, although it warned cost pressures and provide chain snags would persist into up coming yr.

Shares in the owner of the Upper Crust chain observed largely in airports and train stations fell in excess of 5% in early trade.

There has been pent-up demand from customers for summer travel because pandemic limitations have been lifted in a lot of countries, main to disruptions at airports and longer hold out occasions for passengers.

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But SSP is also struggling with sky superior expenditures and inflationary pressures as nicely as lessen client paying out amid a value-of-living crunch. examine additional

“We are perfectly-positioned to reward from the continued restoration of the journey sector, notwithstanding the existing challenges of airport disruption, labour shortages and industrial action throughout selected air and rail markets,” SSP claimed in a statement.

SSP expects annual revenue to be at the upper conclude of its 2 billion to 2.1 billion pounds ($2.5 billion) forecast array, and core earnings margins of all over 6%.

“We see vacation concession operators as a way to play the recovery in journey devoid of the money danger or ESG difficulties of investing instantly in transportation assets like airways,” Stifel analyst said, referring to environmental, social and governance problems.

SSP claimed strong restoration in air vacation experienced boosted its Uk product sales, but rail functions were being dented by strikes that introduced the network near to a standstill in excess of several days final thirty day period.

British rail and transportation personnel this week voted for strike action in a dispute in excess of shell out, threatening a lot more disruption.

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

The London-outlined firm, which operates in 36 countries, reported it was self-assured it could mitigate the impact of the pressures by raising costs and efficiency.

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

Our Expectations: The Thomson Reuters Trust Rules.

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