SSP Group – the air and rail travel F&B specialist whose businesses has been battered by the coronavirus pandemic – will look to areas such as culinary automation to improve efficiencies as it bids to mount a fightback once restrictions are lifted.
The company today announced a £475m rights issue in an attempt to raise capital after revealing that its sales continue to be down 80% on what they were prior to the pandemic. SSP has made 14,000 roles redundant in the past 12 months, underscoring the severity of the crisis facing the business.
Having reduced its operating costs by 66% to £584m in the six months to 30 September 2020, SSP is confident that it will benefit from the market’s recovery once society reopens again due to its exposure to domestic and leisure travel.
SSP has identified the delivery of efficient revenue conversion as one of the core pillars of its strategy to recover from the pandemic.
It plans to retain the structural benefits and efficiency measures achieved during the pandemic where relevant, and will continue to re-engineer various aspects of the business to optimise margins.
“Building on the operational leverage inherent in the business, we continue to avoid unproductive costs, simplify and further automate culinary processes to drive efficiencies and manage input cost inflation,” the company stated.
“We will continue to re-engineer our customer offer to optimise gross margins by reducing product ranges where appropriate and simplifying menus to focus on the best-selling, highest margin items. This approach will assist in reducing waste and driving greater purchasing and production efficiency.”
SSP also intends to accelerate the roll-out of digital technology, including customer ordering and payment technology models.
In addition to delivering a safer and improved customer experience, this is expected to lead to an increase in average transaction values while simultaneously reducing labour costs, the company said.
Simon Smith, CEO of SSP, commented: “Over the past year the group has experienced an unprecedented period of disruption in the travel sector. Early and extensive action has enabled us to protect the business and put ourselves in the best possible position to emerge strongly as the market recovers.
“Strengthening the balance sheet now will underpin the business if the recovery in the travel sector is slower than we anticipate and it gives us the capacity to invest in growth opportunities as we emerge from the pandemic. Our current expectation is that the early recovery will be led by domestic and leisure travel from which we are well-placed to benefit.”