# SSP Group update on the COVID-19 virus

- Link: https://www.directorstalkinterviews.com/ssp-group-update-on-the-covid-19-virus/412806546
- Published: 2020-02-26T07:26:39+00:00
- Author: Giles Arbor

**SSP Group plc** (LON:SSPG), a leading operator of food and beverage outlets in
travel locations worldwide, will today hold its Annual General Meeting and, ahead
of this, has issued an update to the market on current trading and the impact of
the COVID-19 virus (Coronavirus).

In the current financial year trading in the UK, Continental Europe and North America,
which together account for approximately 86% of Group revenue, has been in line 
with our expectations. In the Rest of the World, which accounts for 14% of group
revenue and comprises the Asia Pacific region, India and the Middle East, we have
seen an impact from the COVID-19 virus.

Since the escalation of the virus during January, our immediate priority has been
the health and safety of our colleagues, customers and partners based across China
and the Asia Pacific region. We have worked closely with our teams and local authorities
to implement a range of additional health and safety policies and protocols covering
hygiene, travel and quarantine periods, in order to keep people fully informed and
as well protected as possible against infection.

In terms of the impact at the airports in which we operate across the region, in
China we have seen sharp declines in both domestic and international air passenger
numbers, which are currently running c. 90% lower YOY. In Hong Kong passenger numbers
are c. 70% lower YOY and across a number of our other Asia Pacific countries, including
Singapore, Thailand, Taiwan and the Philippines, passenger numbers are between 25%
and 30% lower YOY. Elsewhere, we have also seen some impact at our airports in Australia,
as well as at major travel hubs in the Middle East and India, although to date this
has been less severe.

In response to the sharp fall in sales in China and across the Asia Pacific region,
we have been working with our clients to maintain appropriate service levels, whilst
taking all the necessary action we can to reduce costs, including the temporary 
closure of units and reduced operating hours.

In terms of the financial impact of COVID-19, our expectation is that for the month
February sales across the Asia Pacific region (which accounts for approximately 
8% of SSP Group revenues) will be approximately 50% lower YOY. Together with the
impact in the Middle East and India, this is expected to reduce overall Group revenue
in February by approximately £10m – £12m, with a corresponding reduction in operating
profit of approximately £4m – £5m.

**Summary and outlook**

Clearly the duration of the COVID-19 virus and its impact on global travel is uncertain
at this stage, as are its consequences for our financial performance for the full
year. SSP Group will continue to take all the necessary action as appropriate. Our
strategy remains unchanged, and we continue to be well placed to benefit from the
significant structural growth opportunities in our markets over the medium term 
and to create ongoing value for our shareholders.

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