Travel-food group SSP tumbles as coronavirus hits sales

British travel-food company SSP warned of a 50% fall in February sales across the Asia Pacific region as the coronavirus outbreak drove a collapse in domestic and international air travel, sending its shares to a more than two-year low.

SSP, which serves 1.5 million customers daily in airports and train stations in 35 countries, said group revenue in February would fall by between 10 million pounds and 12 million pounds due to the outbreak.

That would reduce operating profit by 4 million to 5 million pounds, it said. The company's pretax profit for the whole of last year was 197 million pounds on revenue of 2.79 billion pounds.

Shares in SSP fell as much as 7% in early trade to hit the bottom of London's midcap index.

"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," the company said in the statement.

WH Smith, which also operates a network of airport and train station kiosks, saw its shares tumble 9.6%.

Airlines have suspended thousands of flights in response to the outbreak, and hundreds of new coronavirus cases were again reported on Wednesday, while the United States warned a pandemic was now likely.

SSP said domestic and international air passenger numbers in China were about 90% lower from a year earlier, while Hong Kong passenger numbers were about 70% lower.

Passenger numbers in other Asian markets, including Singapore, Thailand, Taiwan and the Philippines, were between 25% and 30% lower.

It said it had also seen some impact on passenger numbers at its airports in Australia, as well as at major travel hubs in the Middle East and India. Put together, Asia Pacific, India and the Middle East account for 14% of overall group revenue.

SSP said it was working with its clients to maintain services in the face of the sharp fall in sales and was trying to cut costs, including the temporary closure of units and reduced operating hours. 

"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 said.

SSP warned last year that some of its operations in North America were hit by flight cancellations following the grounding of Boeing's 737 MAX aircraft.

The company last month reported a 1.2% rise in comparable first-quarter sales despite transport strikes across France during December and pro-democracy protests in Hong Kong.

By Noor Zainab Hussain