SSP Group plc (LON:SSPG) said it is considering plans to cut up to 5,000 jobs as its outlets at airports and other transport hubs were hit hard by lockdown measures during the coronavirus pandemic.
In a trading update, the FTSE 250 group said passenger numbers still remained at “very low levels” as a result of travel restrictions, and while recently announced ‘air bridges’ between countries and the start of the summer holiday season may lead to a limited return of short-haul air travel, capacity and long-haul trips were still expected to be “significantly reduced”.
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As a result, SSP said by autumn it expected only around 20% of its units in the UK will have reopened, and it had concluded that it was required to “simplify and reshape” its UK business and that it would need to implement job cuts if the pace of recovery continued at the current level.
The company said the redundancies will come from its head office and UK operations, costing it between £8-£10mln.
Meanwhile, in an update on its current trading, SSP said its sales in April and May, when lockdown measures were in full effect, were down 95% year-on-year, while June had seen a slight recovery and were down only 90% compared to a year ago.
The firm said it had seen stronger performances in continental Europe and North America, although this had been offset by the UK and the rest of the world.
As a result, the company continued to expect that it will report an operating loss of £180-£250mln in the second half of its current year, alongside an 80%-85% year-on-year revenue drop in the period.
In a note, analysts at Liberum said despite the difficulties the company had “demonstrated its adaptability in the eye of the storm” and expected SSP to gain market share as air and rail travel resumed in the future, retaining their ‘buy’ rating and 500p share price.
Shares in SSP slipped 2.7% to 250.2p in mid-morning trading on Wednesday.