SSP is asking investors for more cash for the third time since the pandemic started, showing just how brutal the crisis has been for some companies.
“Business has dried up for its cafes and restaurants in airports and train stations, forcing the company to go cap in hand and ask for more funds until travellers return. It raised £216 million a year ago going into the crisis and then a further £11 million in June to offset the costs of paying a dividend.
“Now it wants £475 million to give it several options depending on how the year plays out. The cash should provide a buffer if the pandemic goes on longer than expected.
“A lot of people are desperate to get back on a plane for a week in the sun and others want to get on a train see friends and family. However, much uncertainty remains over when travel restrictions will be lifted in the various countries in which SSP operates. Then there is the question as to whether a many people will feel confident mixing in crowded spaces so soon after the crisis.
“Assuming wings get back in the sky and wheels start to turn again later this year, SSP would then have some money left over from the fundraise to invest for its future.
“Importantly, there are some clues in SSP’s statement which suggest the rebound in the travel sector could take longer than some people might think. It doesn’t expect passengers to approach pre-Covid levels until its financial year ending September 2024. That might explain why it needs to strengthen its finances now to help see it through a potentially slow recovery.
“At some point we’ll all be buying a croissant and a coffee while waiting to go on a journey; and it’s almost certainly a ‘when’ not ‘if’. SSP just cannot have full confidence in when that will be.”