Travel caterer SSP is seeking to raise approximately £475m after a year that saw the company make 14,000 redundancies and sales nosedive by up to 95% due to restrictions on domestic and international travel.
Having already raised £209m last March through an equity placing, SSP said it intends to raise new funds by way of a rights issue to protect the business in a worst-case scenario of the global travel sector experiencing an even more prolonged recovery from the pandemic, as well as strengthen its balance sheet and provide increased capacity for investment as the market recovers. It already has an existing pipeline of around 90 sites, primarily across Europe and North America, and said it was still focused on organic growth.
The group said it did not expect a return of passenger numbers to pre-Covid levels until the 2024 financial year and that although it was confident in the medium-term outlook, recovery remains uncertain and slower than expected.
SSP said it will seek to extend its existing contracts to secure longer-term and more flexible rental agreements and that it had liquidity of £420m as of 31 January 2021, with approximately 71% of units across the world still closed at the end of February. Sales continue to be down approximately 80% in the current quarter given the ongoing impact of the pandemic.
The group has also extended its banking facilities, including term loans of £373m and revolving credit facility of £150m, which were due to mature on 15 July 2022 to 15 January 2024, to support it as it burns through £25m-£30m a month.
Simon Smith, chief executive of SSP, said: "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.
"We are ready to reopen rapidly, welcome back our teams, and provide our travelling customers with a great service when they return. Looking further ahead, the actions we're taking will allow us to capitalise on the recovery as well as future new business opportunities, enabling us to deliver long term sustainable growth for the benefit of all our stakeholders."
SSP operates food and beverage concessions in airports, train stations and motorway service stations. Prior to the onset of Covid-19, it served around one and a half million customers every day at approximately 180 airports and 300 rail stations in 35 countries around the world and operated around 2,700 units consisting of more than 550 international, national and local brands.