SSP, the operator of food and beverage outlets in travel locations, is enacting a restructuring plan aimed at generating £30 million in annual savings.
Restructuring and Cash Flow Targets
SSP aims to streamline operations and bolster its financial position after pandemic-related disruptions.
- SSP is implementing a restructuring plan to achieve £30 million in annual savings.
- The company reaffirmed its target of £100 million in free cash flow for the full year 2026.
- A £100 million share buyback program, initiated in October, hasn’t significantly impacted investor sentiment.
- SSP’s share price has partially recovered since its preliminary figures were released, aligning with industry peers.
- Recent share purchases by board members, including CEO Patrick Coveney and CFO Geert Verellen, signal confidence in the company’s future.
Management also reiterated its target of £100 million in free cash flow for full-year 2026, a goal considered achievable given the company’s recent positive free cash flow of £80 million over the last financial year. While these measures aren’t a dramatic overhaul, SSP is clearly focused on enhancing shareholder value as its stock continues to trade below pre-pandemic levels.
What impact did the pandemic have on SSP’s business? The group experienced a substantial decline in sales due to the widespread disruption of both domestic and international travel during the pandemic. This also led to an increase in the company’s net debt relative to its asset base, a common challenge for many businesses during that period.
SSP wasn’t alone in facing plummeting trading volumes during lockdowns, but its recovery in foot traffic at its locations worldwide proved slower than anticipated. However, the company’s share price has seen some improvement since the release of its preliminary results, now trading in line with competitors at a median multiple of 3.43 times on an enterprise/cash profit basis.
Following the release of the latest preliminary figures, several board members demonstrated their support through share purchases. Notably, SSP’s chief executive Patrick Coveney and its finance chief Geert Verellen collectively invested £325,162 in company stock.
