After results from airline operators enjoyed a warm welcome in the past week, SSP Group plc (LSE:SSPG), which peddles food and drink in travel hubs such as airports, and online beach tour specialist On the Beach should both be expecting similar in the coming week if their numbers are on the sunny side.
Ryanair and easyJet saw their shares fly 10% and 7% higher over the week, following their numbers.
Clients of Saxo Markets were so impressed they bought six times more stock in the budget airlines on the day of their earnings reports this week, the broker said.
SSP found itself in schtuck during the height of the pandemic but has since returned to profit.
The Caffe Ritazza and Upper Crust owner said in February that in the first four months of its fiscal year from October to end-January it had been trading profitably, as workers slowly return to the office, at least for part of a week.
Management’s medium-term expectations are for a return by 2024 to like-for-like revenues and underlying earnings (EBITDA) margins at broadly similar levels to 2019 so investors will be focusing on how close it is to hitting that target.
However, analysts at Barclays are not hopeful for much, noting that the second quarter "saw a slower and bumpy recovery", and the reports from airlines since the end of the period have shown that travel trends have improved in what is the FTSE 25-listed group's second half.
First-half sales are expected to be at 60% the same period in the 2019 financial year, Barclays said, implying an underlying profit (EBITDA) of £7mln, still helped by government support.
Full-year guidance is thought "unlikely to change given rising inflationary pressures and gov’t support coming off".
Pent-up demand is probably going to be the watchword for On the Beach Group (LSE:OTB) in its interims.
In the four weeks to 23 February 2022, group sales were up 50% on 2019 levels, as travel restrictions were eased and business recovered from the unwelcome impact of the Omicron variant of Covid-19 on sales in November, December and January.
The pandemic threat may be receding but the cost of living concerns are growing, which may be having an impact on big-ticket purchases, such as getaway holidays.