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Travel food retail specialist SSP Group has said this morning it has had a “good” start to its financial year, though its recovery in revenues was hit in December and January by the spread of the Omicron variant. 

Updating the market on the four months to 30 January ahead of its AGM, SSP said total revenues were at 62% of 2019 levels in the period. 

Trading had recovered well over the summer and early autumn, with sales running at 66% of 2019 levels in the first nine weeks of the new financial year, driven by the rail sector at 71% of 2019 levels as it benefited from a return to office work as well as strengthening leisure traffic. 

The air sector was at 62%, boosted by an extended holiday season in the autumn across the UK, Continental Europe and North America. 

However, the spread of the Omicron variant around the world and the subsequent government restrictions have inevitably had an impact on passenger numbers, leaving overall Group sales in the latest eight weeks at 57% of 2019 levels.  

SSP said trading remained resilient during December and throughout the holiday period, before softening in early January.  

Recent weeks have been “more encouraging”, as government restrictions have been lifted in the UK and some Continental European markets, with sales now trending positively again, driven mainly by strengthening trading in the rail sector as commuter travel returns. 

SSP Group currently has 1,950 units open, which is 72% of the estate. 

Underlying EBITDA was positive during the first quarter of the financial year. Net cash flow during the first quarter was broadly neutral as working capital has continued to benefit from payment deferrals.   

It stated: “Whilst the Omicron variant continues to have some impact on trading, we are confident in our ability to manage any short-term volatility and, subject to no further government restrictions being introduced, we are well positioned for the important summer trading period.”  

“Our medium-term expectations, which are for a return to like-for-like revenues and EBITDA margins at broadly similar levels to 2019 by 2024, remain unchanged.” 

SSP Group shares are up 2.9% on the update to 271.8p.

Morning update 

Carlsberg has this morning posted 2021 performance “well ahead” of pre-COVID 2019 figures, driven by strong top-line growth. 

The brewer’s organic revenues were up 10%, with reported growth of 13.8% to DKK66.6bn. 

Revenue per hectalitre was up 3%, with total organic volume growth of 7.4%. 

Of its key brands, Tuborg volumes were up 17%, Carlsberg up 5%, 1664 Blanc up 24%, Somersby up 10%, while Grimbergen fell 3%. 

Craft & speciality products rose 15% and alcohol-free brews were up 17% in the period. 

The strong top-line growth saw organic operating profit grow 12.5%, with reported operating profit growth of 12% to DKK10.9bn. 

Reported operating margin fell back 30bp to 16.3%, but excluding acquisitions was up 30bp to 16.9%. 

As a result of the strong performance, Carslberg has proposed a 9% increase in dividend to DKK24 per share, equal to an adjusted payout ratio of 49%. 

During 2021 and up until 28 January 2022, the Company bought back shares amounting to DKK 4.0bn. Once again in 2022, the Company intends to execute quarterly share buy-back programmes, launching the first DKK1bn programme today, which will run until 22 April.  

However, it cautioned 2022 will be “another challenging year”. 

It stated: “COVID-19 is expected to continue to impact our markets to various degrees. At the same time, our business will be impacted by substantial increases in input costs, which we aim to offset in absolute terms through higher revenue/hl and continued tight focus on costs.” 

It said this higher revenue/hl may have a negative impact on beer consumption and, as a result, 2022 guidance is organic operating profit growth of a more modest 0-7%. 

CEO Cees ’t Hart said: “We’re very satisfied with the Group’s 2021 performance. Although our business was significantly impacted by COVID-19, we delivered strong top- and bottom-line growth and free cash flow.  

“Our results in 2021 are well above the pre-pandemic levels of 2019. The Group’s financial situation is very strong, and we’re pleased to announce that the Supervisory Board recommends another solid increase in dividends for 2021 and a new share buy-back programme.  

“The significantly higher input costs and continued impact from COVID-19 will pose challenges in 2022, but we’re well prepared.“We have also launched our new strategy, SAIL’27, with clear priorities for our portfolio, geographies, execution and culture and with ambitious long-term growth aspirations for the Group. Building on the strong foundation of SAIL’22 and our ambitions for the next strategy period, we’re convinced that we can continue our sustainable long-term value creation.” 

Carlsberg shares are up 1.3% to DKK1,140 so far this morning on the news.

According to BRC-Sensormatic IQ data, total UK footfall decreased by 17.1% in January compared to pre-pandemic figures. 

The level does represent a 1.5 percentage point improvement on December and is just above the 3-month average decline of 17.3%. 

Footfall on High Streets declined by 24.2% in January compared with 2019, 1.1 percentage points worse than last month’s rate and below the 3-month average decline of 22.2%. 

Retail Parks saw footfall decrease by 13%, while shopping centre footfall declined by 37.5%.  

Northern Ireland again saw the shallowest footfall decline of all regions at -9.5%, followed by Scotland at -16.2% and Wales at -16.9%. England saw the deepest decline at -19.8%. 

Helen Dickinson OBE, Chief-Executive of British Retail Consortium, said: “It was a slow start to 2022, with only minor improvements to UK footfall despite a significant decline in Covid cases. Indeed, it was quality over quantity in January; less people visited retail parks and shopping centres, but those who did went to more stores at each location.  

“Even as [COVID] restrictions are eased, retail footfall will not return to pre-pandemic levels any time soon. This poses a challenge to many town and city centre retailers who continue be impacted to from lower commuter numbers. However, opportunities remain; innovative retailers are reacting to new consumer behaviours by investing in physical and digital offerings in order to draw in new customers.  

“The return of other sectors, from hospitality to tourism, may create additional competition for customer spending, but it also brings new life and custom to many vital shopping destinations.” 

Andy Sumpter, retail consultant EMEA for Sensormatic Solutions, added: “While total retail shopper traffic improved marginally on December’s figures, footfall’s recovery remains plateaued.  January became the fourth successive month in which shopper counts struggled to reach the highest recovery levels seen back in October.   

“With the Government dropping covid Plan B curbs and work from home guidance, retailers will be hoping consumer confidence will also return along with the commuter trade to boost footfall and put a spring back in to the step of the High Street’s recovery.” 

On the markets this morning, the FTSE 100 is back up 0.4% to 7,560.6pts.

Risers include Devro, up 2.8% to 223.5p, Naked Wines, up 2.1% to 481p and THG, up 2.1% to 116.6p.

Fallers include Virgin Wines, down another 3.2% to 150p, Science in Sport, down 2.2% to 64.1p and FeverTree, down 1.7% to 2,152.4p. 

Yesterday in the City 

The FTSE 100 closed yesterday down 0.8% at 7,528.8pts. 

Virgin Wines tumbled 22.5% to 155p after releasing a profits warning, amid rising costs and lower than expected customer recruitment. 

Other fallers included THG, down 9.9% to 114.2p, Naked Wines, down 8.7% to 471p, Just Eat, down 6.4% to 232p, Deliveroo, down 4.8% to 145.5p, McBride, down 4.4% to 47.3p, Ocado, down 4.4% to 1,445.5p and Marks & Spencer, down 2.7% to 212.4p. 

The day’s risers included Compass Group, which was up 4% to 1,720p after posting a strong recovery in revenues across its business. 

Other risers included AG Barr, up 5.5% to 538p, Science in Sport, up 2.3% to 65.5p, Nichols, up 1.7% to 1,380p, Cranswick, up 1.2% to 3,766p, Finsbury Food Group, up 1.1% to 92p and Britvic, up 1.1% to 940p.