TIDMSSPG
RNS Number : 5386S
SSP Group PLC
17 March 2021
LEI: 213800QGNIWTXFMENJ24
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE THE EXTENSION OR AVAILABILITY OF THE RIGHTS ISSUE (AND ANY
OTHER TRANSACTION CONTEMPLATED THEREBY) WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT FOR THE PURPOSES OF
REGULATION (EU) 2017/1129 AS IT FORMS PART OF DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("EUWA") AND
UNDERLYING LEGISLATION AND NOT A PROSPECTUS. NEITHER THIS
ANNOUNCEMENT NOR ANY PART OF IT SHOULD FORM THE BASIS OF OR BE
RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO
ANY CONTRACT OR COMMITMENT WHATSOEVER. NOTHING IN THIS ANNOUNCEMENT
SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE.
ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR
OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW
ORDINARY SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION
CONTAINED IN THE PROSPECTUS ONCE PUBLISHED BY SSP GROUP PLC (THE
"COMPANY") IN DUE COURSE IN CONNECTION WITH THE RIGHTS ISSUE.
COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE
FROM THE REGISTERED OFFICE OF THE COMPANY AND ON ITS WEBSITE AT
HTTPS://INVESTORS.FOODTRAVELEXPERTS.COM/INVESTORS/RIGHTS-ISSUE.ASPX
.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION (EU) NO 596/2014 AND ARTICLE 7 OF
ONSHORED REGULATION (EU) NO 596/2014 AS IT FORMS PART OF DOMESTIC
LAW BY VIRTUE OF THE EUWA.
FOR IMMEDIATE RELEASE.
17 March 2021
SSP GROUP PLC
STRENGTHENING SSP'S FINANCIAL POSITION THROUGH A COMPREHENSIVE
SET OF BALANCE SHEET MEASURES, INCLUDING A FULLY UNDERWRITTEN
RIGHTS ISSUE TO RAISE GROSS PROCEEDS OF APPROXIMATELY GBP475
MILLION
SSP Group plc ("SSP" or the "Group" or the "Company") today
announces its intention to raise gross proceeds of approximately
GBP475m by way of a fully underwritten 12 for 25 Rights Issue (the
"Rights Issue"). Alongside and conditional upon the Rights Issue,
the Group has secured the extension of its bank facilities that
were previously due to mature in July 2022 to January 2024, and
secured waivers and modifications of the existing covenants under
those bank facilities and its US private placement notes.
This holistic set of balance sheet measures will significantly
strengthen SSP's financial position and resilience, and will
position SSP for the next phase of the pandemic. These measures
will protect the business if the global travel sector experiences a
more prolonged recovery from the pandemic, whilst under SSP's base
case scenario, they will strengthen the Group's balance sheet and
provide increased capacity for investment as the travel market
recovers.
Key Highlights
-- SSP has a strong track record of operational and financial
performance, significantly expanding the scale of the business
while generating high returns on investment. In the five year
period to 30 September 2019, SSP increased underlying operating
profit by 150%, and delivered a total shareholder return of 231%
between SSP's IPO in July 2014 and 31 December 2019.
-- Since the start of the pandemic, SSP has taken rapid and
decisive action to protect its people and the business, generating
significant liquidity, reducing costs and minimising cash usage.
However, the Group continues to see cash outflows, as a result of
the very low level of activity in the global travel market.
-- The Board is confident in the medium term outlook for the
Group's end markets, but the profile of the recovery remains
uncertain. Notwithstanding the rapid approval of Coronavirus
vaccines and the global roll-out of vaccination programmes, new
variants of the virus, vaccine supply constraints and various
lockdown and travel restrictions mean that the pace of the recovery
in 2021 has been delayed relative to the Group's expectations
towards the end of 2020.
-- Against this backdrop, and having considered a number of
different scenarios and financing alternatives, the Group is taking
a set of proactive actions to strengthen its balance sheet:
o the Rights Issue to raise gross proceeds of approximately
GBP475m;
o the extension of bank facilities that were due to mature in
July 2022 to January 2024; and
o waivers and modifications of existing covenants under SSP's
bank facilities and US private placement notes.
-- This Rights Issue will:
1. Cover liquidity requirements under a reasonable worst case
scenario, including the repayment of the GBP300m CCFF in February
2022, thereby paving the way for future growth in a disrupted
competitive landscape.
2. Facilitate extensions to bank facilities and secure covenant waivers.
3. Reduce leverage and under the Group's base case scenario,
increase capacity for investment as the pandemic recedes.
-- The Group is strategically well-positioned to benefit from
the recovery in the travel sector. SSP expects a near full return
of passenger numbers to pre COVID levels by financial year 2024 led
by a rebound in domestic and leisure short-haul air and rail
travel. Under SSP's base case scenario, Adjusted EBITDA margins
would return to pre-Coronavirus levels in the medium term.
-- The actions SSP has taken during the crisis have laid the
foundations for it to optimise its performance during the recovery
and emerge in a stronger position to benefit from the structural
growth in the global travel market. By strengthening the balance
sheet now, SSP can focus on reopening and optimising its estate,
and opening its existing pipeline of approximately 90 new units. In
the medium term, under the Group's base case scenario, SSP will
have the financial capacity to accelerate its new contract growth
and gain market share as the travel sector is reshaped by the
pandemic.
-- SSP's financial strategy will continue to be underpinned by
the same disciplined investment criteria and priorities for the use
of cash, with the primary focus being on organic growth. In SSP's
base case scenario, in the medium term, leverage would be below the
historical target range of 1.5-2.0x Adjusted Net Debt to Adjusted
EBITDA. In this scenario, there would be up to an additional
GBP350-400m to invest in the business, with any surplus cash
returned to shareholders.
-- SSP believes that the balance sheet measures announced today,
together with the operational actions it has taken over the past 12
months, will enable the Group to emerge from the crisis in an
advantaged position, and with an agile and flexible business that
will be well-positioned to deliver sustainable growth for the
benefit of all stakeholders.
Simon Smith, CEO 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 re-open 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."
Background to and Reasons for the Proposed Rights Issue
Introduction
Since its IPO in 2014, SSP has generated exceptionally strong
performance, delivered against its strategic plans and generated
significant value for shareholders in the period prior to the
Coronavirus pandemic.
In the five-year period to 30 September 2019, SSP's revenues
increased by 53% from GBP1,827m to GBP2,795m, and Underlying
Operating Profit increased by 150%. This performance has resulted
in excellent shareholder returns, with a total shareholder return
between SSP's IPO in July 2014 and 31 December 2019 of 231%.
Impact of, and response to, the Coronavirus pandemic
The Group has been significantly impacted by the Coronavirus
pandemic, given that the air and rail travel sectors typically
comprise 95% of SSP's revenue. SSP's sales were down 95% (relative
to 2019 levels) in April and May 2019, and sales continue to be
down approximately 80% (relative to 2019 levels) in the current
quarter given the ongoing impact of the pandemic.
Since the start of the pandemic, SSP has taken decisive action
to protect the business and preserve cash flow. At the peak, SSP
closed approximately 2,500 units and furloughed more than 22,000
employees globally where furlough schemes were available or under
contractual layoff provisions. Where the outlook was for a very
slow recovery in passenger travel and where the furlough schemes
were planned to be scaled back or removed, SSP took a number of
very difficult decisions to protect cash and manage the size of the
organisation in response to the pandemic which regretfully included
reducing contractual and temporary workers and making approximately
14,000 roles redundant. SSP also took an array of financing
actions, including an equity placing of GBP209m in March 2020.
As a result of these actions, SSP was able to reduce its
operating costs by GBP584m (66%) in the six month period to 30
September 2020 (relative to the equivalent period in 2019). It also
contained cash outflow in this period to GBP195m, which was
materially better than the Group's expectations set out in the
Group's half year results in June 2020 of GBP340-440m cash outflow
during this six month period.
Context for Strengthening the Balance Sheet
The travel concession catering sector is a structurally
attractive and highly fragmented market, and SSP is well positioned
within it, holding #1 or #2 positions in key geographies. The Board
is confident in the medium-term recovery of SSP's end markets. The
Group is well-placed to benefit early from this recovery given its
exposure to domestic and leisure travel, which are expected to
rebound more quickly.
However, the timing of the recovery has been prolonged relative
to the Group's expectations at the outset of the pandemic.
Notwithstanding the rapid approval of Coronavirus vaccines and the
global roll-out of vaccination programmes, new variants of the
virus, vaccine supply constraints and various lockdown and travel
restrictions mean that the pace of the recovery in 2021 has been
delayed relative to SSP's expectations towards the end of 2020.
These factors also mean there are ongoing uncertainties as to the
pace and shape of the recovery.
Against the backdrop of a more prolonged and uncertain recovery,
the Board has updated its base case and reasonable worst case
scenarios for the Group. In light of these updated scenarios, and
recognising the upcoming maturity of the GBP300m CCFF in February
2022 and the Group's bank facilities in July 2022, the Board
believes that the most appropriate course of action at this point
for the Group and its shareholders is to further strengthen the
balance sheet through a holistic solution, comprising:
i. A Rights Issue to raise gross proceeds of approximately GBP475m;
ii. Extension of the Group's term loans of GBP373m and revolving
credit facility of GBP150m that were due to mature on 15 July 2022
to 15 January 2024; and
iii. Agreement of further waivers and modifications of existing
covenants under the Group's bank facilities and US private
placement notes.
The extension of these facilities and adjustments to the
covenants are conditional on the Rights Issue.
The objectives of these balance sheet measures are to:
i. Cover liquidity headroom under a reasonable worst case scenario
The package of balance sheet strengthening measures is expected
to provide sufficient liquidity under the reasonable worst case
scenario to cover the expected cash usage during this period (which
remains at GBP25-30m per month at current passenger volumes),
including repayment of the GBP300m CCFF which is scheduled to
mature in February 2022.
Under the reasonable worst case scenario, these measures will
protect the Group and pave the way for future growth in a disrupted
competitive landscape.
ii. Facilitate extensions to SSP's bank facilities, and secure
covenant waivers
The Rights Issue will facilitate the extension of upcoming
maturities of SSP's bank facilities, address the February 2022
maturity of the CCFF and allow the Group to secure meaningfully
improved flexibility under financial covenants with lenders. This
increased flexibility accommodates the reasonable worst case
scenario in particular.
The Group has GBP373m of term loans that expire in July 2022 and
an undrawn RCF of GBP150m which expires on the same date. SSP has
agreed with its lenders that these facilities will be extended to
15 January 2024, conditional on the Rights Issue. SSP has also
secured significant extensions and waivers to its covenants with
lenders, conditional on the Rights Issue.
iii. Reduce leverage and increase capacity for investment as the
pandemic recedes
The Rights Issue will raise gross proceeds of approximately
GBP475m, which will result in a material reduction in net
indebtedness.
Under the Group's base case scenario, in addition to delivering
a reset of leverage levels, the Rights Issue will, over time,
provide capacity to invest in the recovery in order to drive
sustainable long term growth.
In the base case scenario, in the medium term, leverage would be
below the historical target range of 1.5-2.0x Adjusted Net Debt to
Adjusted EBITDA. In this scenario, there would be up to an
additional GBP350-400m to invest in the business, with any surplus
cash returned to shareholders.
SSP's financial strategy and priorities for the use of cash
remain unchanged, with the Group's primary focus remaining on
organic growth. The Group anticipates there will be a number of
opportunities to win new contracts and gain market share as SSP's
sector is reshaped by the pandemic. SSP has a track record of
delivering strong returns from new units, with average payback
periods of 3-4 years on a discounted cash flow basis. In-fill
acquisitions will also be considered where they fit with SSP's
strategy.
The Group's investment decisions will continue to be based on
strict return requirements and, naturally, will depend on the
opportunities and prevailing conditions at that time.
SSP's Strategy
SSP's strategy is flexible and tailored to each market. It is
characterised by three phases: Protection, Recovery and Sustainable
Growth. Under the Group's base case scenario, the travel sector
will achieve a gradual recovery for which the focus is on
re-opening units and then driving sustainable growth. The
Protection element is described below in the context of the
immediate response to the pandemic.
Recovery
The re-opening of certain markets in summer 2020 allowed SSP to
test and validate the Group's re-engineered operating model. The
strategy for the recovery will focus on a data-driven and
systematic approach to re-opening, and opening units profitably
even at low levels of footfall. In part, this is achieved through
negotiating flexible rent deals with landlords, re-engineering and
simplifying the customer offering, rolling out digital technology
and selectively adding complementary revenue streams.
Sustainable Growth
Once there is sustainable recovery from the pandemic, the
Group's focus will shift more to driving sustained profitable
growth, with a focus on SSP's proven strategic levers.
-- Optimising the customer proposition to drive like-for-like revenue growth through a range of opportunities from unit location to the customer proposition, strengthened brand relationships and optimising customer capture rates and spend.
-- Delivering efficient revenue conversion. Running efficient
operations is a core competency and deeply embedded in SSP's
culture. SSP will 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.
-- Optimising and growing the estate. SSP has a strong track
record of growing profitable new space. SSP will seek to extend its
existing contracts to secure longer-term and more flexible rental
agreements. SSP has a pipeline of new contracts to mobilise,
comprising approximately 90 new units, which SSP will do
selectively once there is greater certainty of the recovery.
In addition, over time, SSP expects to see new tenders which it
will be in a strong position to bid for, retaining high hurdle
rates. The Group expects to see opportunities both for new units as
well as pre-existing units which have not re-opened following the
pandemic. Further, as the market recovers, SSP will selectively
look at new markets, based on the outlook at the time. SSP has a
track record of delivering strong returns from new units, with
average payback periods of 3-4 years on a discounted cash flow
basis.
Finally, selective and disciplined bolt-on M&A has always
been part of SSP's strategy. It is likely that new acquisition
opportunities will arise during the recovery from the Coronavirus
pandemic.
Current Trading and Financial Outlook
Trading in the Six Month Period to 31 March 2021
The prospectus relating to the Rights Issue contains financial
information for the quarter ended 31 December 2020. In this period,
passenger demand remained low with revenues down 78% relative to
the equivalent period in 2019. In the quarter, the Group achieved
an Underlying Operating Profit conversion of approximately 22% on
the lost sales.
Over the four month period to 31 January 2021, cash usage was
GBP120.1m, including the impact of approximately GBP11.5m of
one-off restructuring costs. As of 31 January 2021, the Group had
available liquidity of approximately GBP420m.
In January and February 2021, revenues were down 82% relative to
the equivalent months in 2019, and in the first week of March 2021,
revenues were down 81% relative to the comparable period in 2019.
Accordingly, for the six month period to 31 March 2021, revenues
are expected to be down approximately 80% relative to the
equivalent period in 2019.
While revenues remain at very low levels (down 75-85% compared
to 2019 levels), ongoing monthly cash usage is expected to remain
at GBP25-30m per month.
Financial Outlook
The return of passenger volumes will be the main driver of a
recovery in sales. SSP expects domestic travel to recover first, as
seen already in China, benefiting Rail and short haul Air
initially, followed by regional Air, driven by leisure travel, and
finally long-haul Air driven by both business and leisure
travel.
The impact of the pandemic on working practices may have a
longer term impact on both business travel in Air and commuter
travel in Rail, although the impact on the Group is mitigated by
its bias toward leisure travel.
SSP currently expects like-for-like revenue (representing sales
from units open during the entirety of the 2019 financial year) to
recover to broadly to 2019 levels in the 2024 financial year,
driven by a recovery in passenger numbers, approaching pre-pandemic
levels for Air and 90-95% for Rail (reflecting continued work from
home practices), and anticipated retail price inflation. In
addition, the full year impact of units opened during 2019 and the
first half of the 2020 financial year, as well as mobilising SSP's
existing pipeline of unit openings, would be anticipated to
contribute a further 10-15% of revenue.
Actions taken during the pandemic to optimise and reduce the
cost base are expected to mitigate the impact of cost inflation and
lower volumes, enabling a return to pre-Coronavirus levels of
Adjusted EBITDA margin in the medium term.
SSP continues to target leverage of 1.5-2.0x Adjusted Net Debt
to Adjusted EBITDA, which provides additional financial cap acity
for investment as detailed above with potential for return of
surplus capital to shareholders.
Directors' Intentions
The Directors believe the Rights Issue is in the best interests
of Shareholders taken as a whole and unanimously recommend that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting, as the Directors intend to do in respect of
their own beneficial holdings, amounting in aggregate to 2,216,282
shares, which represent approximately 0.4% of the total voting
rights in the Company as at the latest practicable date.
Each of the Directors either intends, to the extent that they
are able, to take up in full or in part his or her rights to
subscribe for New Shares under the Rights Issue or to sell
sufficient of their Nil Paid Rights during the nil paid dealing
period to meet the costs of taking up the balance of their
entitlements to New Shares.
Prospectus
A Prospectus in relation to the Rights Issue (the "Prospectus")
is expected to be published at
https://investors.foodtravelexperts.com/investors/rights-issue.aspx
today. The preceding summary should be read in conjunction with the
full text of the following announcement, together with the
Prospectus. Unless the context otherwise requires, words and
expressions defined in the Prospectus shall have the same meanings
in this announcement.
Indicative Summary Timetable of Principal Events
Publication and posting of combined 17 March 2021
prospectus and circular
Record Date for entitlements under close of business 1 April
the Rights Issue 2021
General Meeting 11.00 a.m. on 6 April
2021
Dealings in New Shares, nil paid, commence 8.00 a.m. on 7 April
on the London Stock Exchange 2021
Existing Shares marked ex-Rights 8.00 a.m. on 7 April
2021
Latest time and date for acceptance 11.00 a.m. on 21 April
and payment in full and registration 2021
of renounced Provisional Allotment
Letters
Dealings in the New Shares, fully paid, 8.00 a.m. on 22 April
commence on the London Stock Exchange 2021
fully paid
Goldman Sachs International is acting as financial adviser and
sponsor to the Company. The Rights Issue is fully underwritten by
Barclays, Goldman Sachs International, HSBC and JP Morgan as Joint
Global Coordinators and Joint Bookrunners. BNP PARIBAS, BoA
Securities and Mediobanca are acting as Joint Bookrunners. Mizuho
Securities and MUFG are acting as Co-Lead Managers. Contact
information for the Joint Global Coordinators is provided at the
end of this announcement.
A conference call will be held at 8.30 a.m (UKT) today and
details of how to join can be accessed at
https://webcasts.foodtravelexperts.com/results/2021rightsissue ,
along with materials relating to the call.
This announcement includes inside information as defined in
Article 7 of the Market Abuse Regulation No. 596/2014 and Article 7
Of Onshored Regulation (EU) No 596/2014 as it forms part of
domestic law by virtue of the EUWA and is being released on behalf
of SSP by Helen Byrne, General Counsel and Company Secretary.
For further information, please contact :
SSP Group plc - Investor and analyst Sarah John, Corporate Affairs
enquiries Director
+44 203 714 5251 / sarah.john@ssp-intl.com
Powerscourt - media enquiries Peter Ogden / Lisa Kavanagh
+44 (0) 207 250 1446
About SSP Group plc
SSP is a leading operator of food and beverage concessions in
travel locations, operating restaurants, bars, cafés, food courts,
lounges and convenience stores in airports, train stations,
motorway service stations and other leisure locations. Prior to the
onset of Covid-19, we 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 more than
550 international, national and local brands across our c. 2,700
units.
See the important notices set out at the end of this
announcement.
Introduction to the Rights Issue
SSP is announcing a proposed fully underwritten 12 for 25 Rights
Issue of 258,076,764 New Ordinary Shares at 184 pence per New
Ordinary Share to raise gross proceeds of approximately GBP475
million.
The Rights Issue price represents a 37.3% discount to the
theoretical ex-rights price per Existing Share by
reference to the Closing Price of 345.8 pence per Existing Share on 16 March 2021.
The Rights Issue is subject to approval by Shareholders at a
General Meeting expected to be held on 6 April 2021.
The Rights Issue is fully underwritten. Further detail of the
underwriting is set out in the Prospectus.
Background to the proposed Rights Issue
Track record prior to the pandemic
Since the Group's IPO in 2014, it has delivered exceptionally
strong operating and financial performance, which has resulted in
excellent shareholder returns.
In the five-year period to 30 September 2019, our revenues
increased by 53.0% from GBP1,827 million to GBP2,795 million. This
growth was achieved through a combination of consistently high
like-for-like sales growth (averaging 2.9% per annum during this
period) and significant new contract growth, with average net
contract gains of 3.8% per annum over this period. Over this
period, our Underlying Operating Profit increased by 150%, from
GBP89 million to GBP221 million, and our Underlying Operating
Profit margin expanded by 310 basis points from 4.8% to 7.9%. This
was achieved through strong revenue growth driving operating
leverage in the business and the continued roll-out of strategic
initiatives.
This performance has resulted in excellent shareholder returns.
We delivered a total shareholder return of 231% between the date of
our IPO and 31 December 2019 (representing an annualised return of
24%), significantly outperforming the FTSE 350 index which
delivered a total return of 43% in the period.
Since the Group's IPO, we have also managed our balance sheet in
an efficient but conservative way, with a stated leverage target of
1.5-2.0x Adjusted Net Debt to Adjusted EBITDA. In the period prior
to the start of the pandemic, our leverage decreased from an
Adjusted Net Debt to Adjusted EBITDA ratio of 2.3x in the year
ended 30 September 2014 to 1.5x in the year ended 30 September
2019.
Impact of the Coronavirus pandemic
The emergence of the Coronavirus pandemic globally confronted
the Group with a sudden and material adverse impact on the global
travel market, including the air and rail travel sectors which are
our key areas of operation, as wide-ranging measures were
implemented across the world in an attempt to contain the spread of
the virus.
Passenger numbers across all of our core markets have been
materially and adversely affected. ACI estimates that air passenger
traffic volumes fell by 26% in the first calendar quarter of 2020,
and then by 89% in the second calendar quarter, as compared to its
projected baseline. ACI estimates that there was a limited recovery
in the third and fourth calendar quarters, with air passenger
volumes down 71% and 64% respectively. ACI Europe estimates that
air passenger volumes have fallen in the first two months of 2021
relative to the fourth calendar quarter of 2020, given the increase
in infection levels in key markets, new variants of the Coronavirus
and new government restrictions on air travel.
Similarly, volumes have decreased significantly across our key
rail markets, which are predominantly in Europe. We experienced
rail sales reductions in excess of 90% during the second calendar
quarter of 2020, and while there was a small recovery in rail
performance in the second half of calendar year 2020, rail sales
have remained low in the first quarter of calendar year 2021.
The material decline in passenger numbers has had a significant
impact on our financial performance. In the second half of the 2020
financial year, the Group's revenues were down 86% as compared to
the second half of the 2019 financial year. Reflecting strong
operational control, our cash outflow in the period was contained
to GBP195 million, a materially better performance than the
expectation included in the June 2020 half year results of
GBP340-440 million cash outflow.
Our trading conditions did not improve during the first and
second quarters of the 2021 financial year.
Our immediate response to the pandemic: "Protection"
In response to the initial outbreak of the pandemic, we
implemented a number of health and safety measures, in line with
local and national guidelines, designed to ensure the safety and
wellbeing of our employees. We also materially increased
communications and rolled out support programmes to colleagues both
working in the business and those on furlough.
We took a number of immediate actions to protect our financial
position during the pandemic. At the peak, we closed approximately
2,500 units and furloughed more than 22,000 employees globally,
where government furlough schemes were available or under
contractual layoff provisions. Where the outlook was for a very
slow recovery in passenger travel and where the furlough schemes
were planned to be scaled back or removed, we took a number of very
difficult decisions to protect our cash and manage the size of the
organisation in response to the Coronavirus pandemic, which
regretfully included reducing contractual and temporary workers and
making approximately 14,000 roles redundant across the
organisation. However, as far as possible, the Group has aimed to
retain its longest-serving and most highly skilled talent in
anticipation of the recovery so that it is well placed to rebound
and mobilise quickly when demand returns.
In addition to salary reductions across the Board, Executive
Committee and Senior Management, our management team took extensive
action to reorganise and simplify the business and reduce the cost
base. These included creating a smaller, leaner and more flexible
organisation structure, streamlining management processes and
reducing unnecessary complexity, negotiating the removal or
modification of MGRs and reducing overheads. The new business
development programme was halted and all non-essential capital
expenditure deferred. As part of our thorough review of our
operating model, we planned for a systematic approach to re-opening
units. Having tested this model, we are confident that we can
re-open our units progressively and profitably as demand
recovers.
We also took action to improve balance sheet resilience,
including (i) completing a GBP209 million equity placing in March
2020; (ii) a subsequent GBP11 million placing which allowed
investors to reinvest their 2019 final dividend into new shares;
(iii) securing GBP300 million access to the CCFF in April 2020
which is available to the Group until February 2022; (iv) securing
waivers and amendments of existing covenant tests up to March 2022
(secured in two stages through amendments agreed in May and
December 2020) and deferring term loan amortisation payments; (v)
suspending our share buyback programme to conserve cash, and (vi)
announcing that we would not pay a dividend in the current
financial year.
At the same time, we are proud to have supported the communities
in which we operate in a variety of ways, including distributing
100,000 freshly baked cookies to NHS hospital staff, and in India,
our joint venture supplying more than 1 million meals to those that
have lost their livelihoods through the pandemic.
Proposed further measures to strengthen the balance sheet
We set out a central planning scenario and a pessimistic
scenario for the year ended 30 September 2020 as part of our equity
placing in March 2020. Under the scenarios set out at that time,
the Board believed that the Group would have sufficient liquidity
and balance sheet flexibility to protect the business through the
Coronavirus pandemic and be well-positioned for investment and
growth as the pandemic recedes. Given the depth and extent of
disruption to our end markets arising from the pandemic, as part of
our financial year 2020 preliminary results in December 2020, we
noted the potential need to raise additional liquidity prior to the
repayment of the CCFF in early 2022, dependent on the pace and
shape of the recovery.
Since December, notwithstanding the roll-out of vaccination
programmes, we have seen increased uncertainty in the operating
outlook as Coronavirus infection levels have increased, new
variants of the virus have emerged, and governments in our core
markets have implemented further lockdowns and travel restrictions
as part of their responses. The Board remains confident in the
medium term outlook for the Group's end markets, but the profile of
the recovery remains uncertain.
Against this backdrop, the Board has updated its base case and
reasonable worst case scenarios for the Group. These scenarios were
used to evaluate the options available to the Group in the debt and
equity markets to strengthen the balance sheet. In determining the
optimal financing solution for the Group (including its timing),
the Board evaluated a number of alternatives in light of, amongst
other factors, the need to manage debt maturities in February 2022
and July 2022, upcoming risk around covenant tests, the fact that a
number of the Group's existing lenders have a contractual right to
be repaid pro rata out of new debt proceeds raised by the Group to
pay down existing debt, audit requirements, the importance of
delivering a long term strengthening of the balance sheet,
preserving pre-emption rights for the Group's shareholders and the
desire to avoid multiple equity financings.
Having concluded this evaluation of the updated scenarios and
given the uncertainties described above, the Board believes that
the most appropriate course of action at this point for the Group
and its shareholders is to further strengthen the Group's balance
sheet.
We believe that addressing our balance sheet challenges at this
point will provide us with a clear runway looking forward to focus
on the opportunities presented by the recovery of the travel
market, including providing appropriate liquidity and financial
capacity to meet even the reasonable worst case scenario.
The measures to strengthen and de-risk the balance sheet that
the Board is pursuing comprise:
i. A Rights Issue to raise gross proceeds of approximately
GBP475 million;
ii. Extension of our term loans of GBP373 million (at 12 March
2021) and revolving credit facility of GBP150 million that were due
to mature on 15 July 2022 to 15 January 2024; and
iii. Agreement of further waivers and modifications of existing
covenants under our bank facilities and outstanding US private
placement notes.
We have already secured agreements with our lenders in relation
to (ii) and (iii) above, conditional on the Rights Issue.
Impact on Liquidity
The package of balance sheet strengthening measures is expected
to provide sufficient liquidity under the reasonable worst case
scenario.
SSP currently has a robust liquidity position, but there are
sizeable debt maturities occurring over the next 18 months and,
under the reasonable worst case scenario, the prospect of continued
material cash usage. Specifically, the Group had liquidity of
GBP420 million as at 31 January 2021. This will be reduced by cash
usage in financial years 2021 and 2022, and further reduced by the
scheduled CCFF maturity of GBP300 million in February 2022 and
maturity of the Group's bank facilities of GBP523 million in July
2022 (of which GBP373 million is currently drawn). This compares to
the requirement to maintain a minimum liquidity of GBP200 million
under the Group's existing package of lender covenants.
Following implementation of the balance sheet measures described
above, the Group's adjusted liquidity position is expected to be as
follows:
GBP million
------------
Liquidity as of 31 January 2021 420
Modelled cash usage to 30 June 2021 (assuming GBP25-30
million cash usage per month) (125-150)
------------
Modelled liquidity on 30 June 2021 270-295
Gross proceeds from the Rights Issue(1) 475
Less: CCFF maturity in February 2022 (300)
Less: minimum liquidity covenant (reduced(2) from
GBP200 million, conditional on the Rights Issue) (150)
------------
Adjusted liquidity as at 30 June 2021 295-320
============
(1) Excluding fees and expenses.
(2) Reduced from February 2022
In addition, as part of these balance sheet measures, the
maturity of the GBP523 million bank facilities will be extended
from July 2022 to January 2024. This provides additional support to
the Group's liquidity position.
Impact on Maturity Dates and Covenants
The Rights Issue will facilitate the extension of our upcoming
maturities of our bank facilities, address the February 2022
maturity of the CCFF and will allow us to secure meaningfully
improved flexibility under our financial covenants with our
lenders. This increased flexibility accommodates the reasonable
worst case scenario in particular. The Group has GBP373 million of
term loans that expire in July 2022 and an undrawn RCF of GBP150
million which expires on the same date. We have agreed with our
lenders that these facilities will be extended to 15 January 2024,
conditional on the Rights Issue.
We have also secured extensions and waivers to our covenants
with lenders, conditional on the Rights Issue. Under our current
covenants, we have an Adjusted Net Debt/Adjusted EBITDA test of
3.25x for the period to March 2022. This covenant has been waived
until March 2024, with new covenants at higher levels as at March
2023, June 2023 and September 2023. As set out above, we have also
secured a reduction, effective from February 2022, in the minimum
liquidity covenant from GBP200 million to GBP150 million. These
covenants have been agreed with our lenders to reflect the
reasonable worst case scenario. These covenants apply to both our
borrowings under our Facilities Agreement and our US private
placement notes (of which GBP322 million are outstanding).
Reduce leverage and increase capacity for investment
The Rights Issue will raise gross proceeds of approximately
GBP475 million, which will result in a material reduction in net
indebtedness.
Under our reasonable worst case scenario, the Rights Issue will
significantly de-risk our balance sheet, protect the Group and pave
the way for future growth in a disrupted competitive landscape.
Under our base case scenario, in addition to delivering a reset of
our leverage levels, the Rights Issue will provide additional
capacity for investment. We anticipate there will be a number of
opportunities to win new contracts and gain market share as our
sector is reshaped by the pandemic. The Rights Issue and the
Group's operating performance over time will provide capacity to
invest in the recovery in order to drive sustainable long term
growth. In SSP's base case scenario, in the medium term, leverage
would be below the historical target range of 1.5-2.0x Adjusted Net
Debt to Adjusted EBITDA. In this scenario, there would be up to an
additional GBP350-400 million to invest in the business, with any
surplus cash returned to shareholders. Our investment decisions
will continue to be based on our strict return requirements and,
naturally, will depend on the opportunities and prevailing
conditions at that time.
SSP's Strengths
We believe that the Group benefits from a number of strengths
that will play an important role as we emerge from the Coronavirus
pandemic and implement our longer-term strategy:
-- We have market leading positions in many of the most
attractive sectors of the travel food and beverage market across 35
countries;
-- Our people have a deep understanding of what our clients and
customers require in a travel environment, a compelling proposition
and in-depth knowledge of how to operate in complex travel
environments which are logistically demanding;
-- We have excellent, long-standing relationships with our
clients, who are principally the owners and operators of airports
and railway stations, and an excellent track record of contract
retention;
-- The Group has strong local insight and a deep knowledge of
the individual markets in which we operate, alongside significant
international scale and expertise; and
-- We benefit from a highly experienced colleague base
throughout the business with a broad skillset across the food and
beverage, travel and retail industries. Within that, we have a
dedicated senior management team, focused on business development,
sales, marketing, human resources and operations, who work closely
with our clients to ensure their requirements are met. During the
pandemic, our management team has demonstrated its ability to
respond to rapidly changing market conditions and has a proven
track record of delivering strong operational and financial
performance.
SSP's Strategy
Our overarching aim remains unchanged - to be the leading
provider of food and beverage in travel locations worldwide,
delivering across all of our stakeholders: our customers, clients,
brand partners, investors and importantly, our colleagues.
We continue to believe that the markets in which we operate are
fundamentally attractive. We estimate that, supported by the
roll-out of Coronavirus vaccination programmes in key markets,
there will be a recovery in travel from the second half of the 2021
financial year compared to the first half of the year. We believe
that air and rail travel markets will deliver long-term growth,
albeit from a lower base, as global GDP recovers and an increasing
proportion of the world's population is willing and able to travel.
The growth in our end markets will also be underpinned by longer
term trends that were evident prior to the pandemic, such as the
trend towards increased eating-out (including eating "on the move")
and investment in travel infrastructure and capacity expansion, in
part supported by government policy.
In the near term, we expect that domestic travel will recover
the fastest, for which the Group is well-positioned given its large
rail businesses in the UK, Germany and France, and its significant
air operations in markets such as the US, Australia, India, China
and Thailand, which are driven by domestic travel. We expect a
strong recovery thereafter in short haul regional leisure travel
notably European leisure air travel, which accounts for over
two-thirds of air demand over the summer months. Over time, the
Group expects that long haul travel will recover, and that the
secular trends that were observed prior to the pandemic, including
emerging middle classes in Asia travelling long haul, and European
/ US leisure travellers seeking long haul destinations, will
continue.
As the markets recover from the Coronavirus pandemic, we may see
some changes in travel patterns. For example, a study commissioned
by the Group suggests that post-Coronavirus, the structural change
due to increased remote working will reduce the level of commuter
traffic in France and Germany by between 3% and 7%, whilst in the
UK the reduction could be greater and in the range of 8% to 10%.
This reflects the higher levels of working from home in the UK
before the Coronavirus pandemic, largely as a consequence of the
structure of the business environment and its weighting towards the
professional and financial services sector, particularly in London.
However, the Board believes the Group will be well-positioned to
adapt, as flexible working ameliorates rush hour peaks generating
more consistent consumption across the day, and leisure travel
(which accounts for a clear majority of our traffic) makes a strong
recovery.
We believe that the strengths described above, and our strategy
described below, will allow us to take advantage of opportunities
as the pandemic recedes and ultimately deliver strong returns for
our shareholders.
We believe that our people are at the heart of our success and,
therefore, a key enabler of our strategy. We plan to implement Our
People Strategy, through which we will seek to invest in our
employees by focusing on retention, engagement and development,
further embedding the Group's values within the organisation and
incentivising critical talent. We are also focused on implementing
our strategy in a manner that supports a wide range of stakeholders
and, as a result, we intend to further embed corporate
responsibility into our business through (i) the relaunch of our
corporate responsibility strategy in line with stakeholder
priorities and (ii) the setting of strategic targets and key
performance indicators. For example, we seek to promote inclusion,
diversity and human rights throughout our business and supply
chain, and we have established partnerships with charitable and
local organisations in the communities which we serve. Beyond this,
we have sought to decrease our environmental impact by committing
to various environmental initiatives, such as cutting food waste
and replacing single-use plastic where possible.
Our strategy is flexible and tailored to each market, to reflect
the stage of recovery from the Coronavirus pandemic and the
opportunities available in each market. As such, our strategy has a
timing dimension to it, and is characterised by three phases:
Protection, Recovery and Sustainable Growth.
I. Protection
In the early stages of the pandemic, we took significant action
to protect our employees, customers and the business. We have
successfully implemented our initiatives in the "Protection"
element of our strategy, including our reorganisation and
right-sizing of the business; the simplification of our operating
model, product ranges and menus, production processes and supply
chains; and rent renegotiations to lower or create more flexible
rental structures by removing or modifying minimum rent
guarantees.
A significant portion of our units remain closed given the
ongoing impact of heightened infection levels and related
government restrictions, and our strategy of protection is thus
ongoing in some of the markets in which we operate. As at 28
February 2021, approximately 71% of our units globally were closed.
However, we expect many of our key markets to transition from this
phase in the second half of calendar 2021.
II. Recovery
The re-opening of certain of our markets in summer 2020 allowed
us to test and validate the Group's re-engineered operating model
at both a Group-wide and individual unit basis. Although many
markets subsequently re-closed as renewed government restrictions
came into force, the experience demonstrated that we are able to
trade even at low levels of footfall. Our approach addresses a
number of aspects, including:
-- A data-driven and systematic approach to re-opening based on passenger traffic volumes;
-- Prioritising unit re-openings based on customer demand and
unit location to capture footfall and expected profitability,
including optimising operations at multi-site locations;
-- Negotiating more flexible rent deals with landlords, which
has typically meant moving to concession fees (based on a
percentage of sales) and, where possible, reducing those concession
fees;
-- Re-engineering and simplifying the offer, and focusing on
best-selling, high margin items, as a result of which we have been
able to optimise our gross margin as well as reduce waste and
improve purchasing and production efficiency;
-- Accelerating the roll-out of service digital technology,
which has been well-received by customers and has been successful
in driving up average transaction values and reducing our labour
costs; and
-- Selectively adding complementary revenue streams, for example
adding the sale of travel and health essentials like masks and
sanitising gel.
By re-engineering the operating model, we were able to open
units profitably at lower levels of footfall, and by the end of
September 2020 we had successfully reopened approximately 1,200
units. By leveraging this lower cost flexible multi-site model, we
are confident that we will be able to reopen units on a profitable
basis going forward as passenger numbers improve.
III. Sustainable Growth
Once the travel sector in each market shows evidence of
sustainable recovery from the pandemic, our focus will shift more
to driving sustained profitable growth, with a focus on our proven
strategic levers as set out below.
(a) Optimising the customer proposition to drive like-for-like
revenue growth
We will seek to optimise existing space through a range of
opportunities from unit location to the customer proposition, to
optimise customer capture rates and spend. This is expected to
drive like-for-like revenue growth.
The scale of our business provides us with access to a wealth of
consumer insight, which we will use to deliver the right
proposition to meet consumers' post-Coronavirus expectations as to
product range (including sustainable offerings), innovation, and
customer-facing digital technologies (including self-service
kiosks, self-scan and contactless payments).
At the same time, we will seek to strengthen our brand partner
relationships, benefitting from improved commercial terms and
greater flexibility on product range and brand standards.
(b) Delivering efficient revenue conversion
Running efficient operations is one of our core competencies and
deeply embedded in our culture. Where relevant and appropriate, we
will retain the structural benefits and efficiency measures
achieved during the pandemic and we will continue to take advantage
of our largely variable cost base to scale up and down efficiently.
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.
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.
In addition, we will continue to optimise our cost base by
opening and closing units more flexibly to match operating costs to
passenger numbers and demand, and maintaining lower head office and
overhead costs, while retaining the capability to grow and develop
the business within the Group's business model.
As mentioned above, we are accelerating 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.
(c) Optimising and growing our estate
We have a strong track record of growing profitable new space.
Prior to the pandemic, we selectively expanded our business through
new unit openings and high levels of contract retention. We had
seen significant growth in North America and in RoW, which together
now account for approximately one-third of our business. We believe
that these large and growing markets (where we still have a
relatively small overall market share), will continue to provide
attractive expansion opportunities in the medium-term, particularly
as the backlog of deferred transportation infrastructure projects
will allow us to participate in new tenders in what we expect to be
a fundamentally altered competitive environment.
The immediate focus is to optimise our current footprint. We
will continue to seek opportunities to extend our existing
contracts where we can secure longer-term and more flexible rental
agreements, benefitting from the current period of disruption and
low passenger numbers. We will selectively consider opportunities
to re-locate units within our existing sites where we expect to be
able to generate higher returns.
We already have a considerable pipeline of new contracts to
mobilise, comprising approximately 90 new units primarily across
Europe and North America, which we will do selectively once we have
greater visibility over the shape of the recovery. We will do this
systematically in conjunction with our clients and where we are
confident that we will meet our financial return criteria. Where
possible, the Group aims to open units during quieter periods so as
to minimise disruption and costs.
In addition, over time, we expect to see new tenders which we
will be in a strong position to bid for, retaining our high hurdle
rates. The Group expects to see opportunities both for new units as
well as pre-existing units which have not re-opened following the
pandemic. Further, as the market recovers, we will selectively look
at new markets, based on the outlook at the time. We have a track
record of delivering strong returns from new units, with average
payback periods of 3-4 years on a discounted cash flow basis.
Finally, selective and disciplined bolt-on M&A has always
been part of our strategy. It is likely that new acquisition
opportunities will arise as we emerge from the Coronavirus
pandemic.
Dividends
Under the terms of the Group's Amended Facilities, the Company
is currently restricted from declaring or paying dividends until
the expiry of certain restrictions that apply during the covenant
waiver and amendment period.
When these restrictions are lifted and conditions improve, the
Board will consider the best way to restart the return of capital
to shareholders and recognise the importance of dividends and
capital returns to shareholders.
Key terms of the Rights Issue
Overview
The Group is proposing to raise aggregate gross proceeds of
approximately GBP475 million from the Rights Issue (approximately
GBP456.1 million after deduction of estimated commissions, fees and
expenses).
Pricing
The Rights Issue Price represents a 46.8% discount to the
Closing Price of 345.8 pence per Existing Share on 16 March 2021
and a 37.3% discount to the theoretical ex-rights price of 293.3
pence per Existing Share based on that same Closing Price.
The Rights Issue Price has been set, following discussions with
major Shareholders, at the level which the Directors believe
necessary to ensure the success of the Rights Issue, taking into
account the aggregate proceeds to be raised. The Directors believe
that the Rights Issue Price, and the discount which it represents,
is appropriate.
Dilution
The Rights Issue will result in 258,076,764 New Shares being
issued and the number of Ordinary Shares being increased from a
total of 537,659,932 Ordinary Shares to a total of 795,736,696
Ordinary Shares, representing an increase of approximately 48.0%,
assuming no Ordinary Shares are issued due to the vesting or
exercise of any awards under the Share Plans or otherwise between
the Latest Practicable Date and the completion of the Rights
Issue.
If a Qualifying Shareholder does not (or is not permitted to)
take up any New Shares under the Rights Issue, such Qualifying
Shareholder's shareholding in the Company will be diluted by
approximately 32.4% as a result of the Rights Issue, assuming no
Shares are issued due to the vesting or exercise of any awards
under the Share Plans or otherwise between the Latest Practicable
Date and the completion of the Rights Issue.
Key terms of the Rights Issue
On and subject to, among other things, the terms and conditions
described in the Prospectus, 258,076,764 New Shares will be offered
by way of rights at the Rights Issue Price of 184 pence per New
Share to Qualifying Shareholders on the basis of:
12 New Shares for every 25 Existing Shares
held and registered in their name on the Record Date (and so in
proportion for the number of Existing Shares then held, subject to
fractional entitlements).
Qualifying Non-CREST Shareholders with registered addresses in
the United States or in any of the other Excluded Territories will
not be sent Provisional Allotment Letters and will not have their
CREST stock accounts credited with Nil Paid Rights, except where
the Company and the Underwriters are satisfied that such action
would not result in the contravention of any registration or other
legal or regulatory requirement in such jurisdiction.
Entitlements to New Shares under the Rights Issue will be
rounded down to the nearest whole number and fractions of New
Shares will not be provisionally allotted to Qualifying
Shareholders. Fractional entitlements will be aggregated and issued
into the market for the benefit of the Company. Holdings of
Existing Shares in certificated and uncertificated form will be
treated as separate holdings for the purpose of calculating
entitlements under the Rights Issue. The Rights Issue has been
fully underwritten by the Underwriters in accordance with the terms
and subject to the conditions of the Underwriting Agreement,
details of which are set out in the Prospectus.
The Rights Issue is conditional upon (among other things): (i)
the passing of the Resolutions at the General Meeting without
material amendment (ii) the Underwriting Agreement having become
unconditional in all respects (save for the condition relating to
Admission of Nil Paid Rights); and (iii) Admission of Nil Paid
Rights becoming effective by not later than 8.00 a.m. on 7 April
2021 (or such later date as the Company and the Underwriters may
agree).
Application will be made to the FCA for the New Shares (nil and
fully paid) to be admitted to listing on the premium listing
segment of the Official List and to the London Stock Exchange for
the New Shares (nil and fully paid) to be admitted to trading on
its main market for listed securities. It is expected that
Admission of Nil Paid Rights will become effective, and that
dealings in the New Shares, nil paid, on the London Stock
Exchange's main market for listed securities will commence, at 8:00
a.m. on 7 April 2021. It is also expected that Admission of the New
Shares (fully paid) will become effective, and dealings in New
Shares, fully paid, on the London Stock Exchange's main market for
listed securities will commence, at 8:00 a.m. on 22 April 2021.
The New Shares will, when issued and fully paid, rank pari passu
in all respects with, and will carry the same voting and dividend
rights as, the Existing Shares.
Overseas Shareholders, including Shareholders resident in the
United States should refer to the Prospectus for further
information regarding their ability to participate in the Rights
Issue.
Contact information for Joint Global Coordinators
Barclays Bank PLC (acting Mark Astaire / Jon Bone / +44 (0) 207
through its investment 623 2323
bank)
Goldman Sachs International Nimesh Khiroya / Jimmy Bastock / +44
(0) 207 774 1000
HSBC Sam McLennan / Joe Weaving / +44 (0)
207 991 8888
J.P. Morgan Edmund Byers / Nicholas Hall / +44 (0)
207 134 3339
IMPORTANT NOTICES
This announcement has been issued by and is the sole
responsibility of the Company. The information contained in this
announcement is for background purposes only and does not purport
to be full or complete. No reliance may or should be placed by any
person for any purpose whatsoever on the information contained in
this announcement or on its accuracy, fairness or completeness. The
information in this announcement is subject to change.
This announcement is not a prospectus but an advertisement and
is for information purposes only. Neither this announcement nor
anything contained in it shall form the basis of, or be relied upon
in conjunction with, any offer or commitment whatsoever in any
jurisdiction. Investors should not acquire any Nil Paid Rights,
Fully Paid Rights or New Shares referred to in this announcement
except on the basis of the information contained in the Prospectus
to be published by the Company in connection with the Rights
Issue.
A copy of the Prospectus will, following publication, be
available (subject to Coronavirus restrictions) from the registered
office of the Company and on its website at
https://investors.foodtravelexperts.com/investors/rights-issue.aspx
provided that the Prospectus will not, subject to certain
exceptions, be available (whether through the website or otherwise)
to shareholders in the United States, Australia, Canada, Japan, the
Republic of South Africa or any other jurisdiction where the
extension or availability of the Rights Issue (and any other
transaction contemplated thereby) would breach any applicable law
or regulation. Neither the content of the Company's website nor any
website accessible by hyperlinks on the Company's website is
incorporated in, or forms part of, this announcement. The
Prospectus will provide further details of the New Shares, the Nil
Paid Rights and the Fully Paid Rights being offered pursuant to the
Rights Issue.
This announcement does not contain or constitute an offer for
sale or the solicitation of an offer to purchase securities in the
United States. None of the securities referred to in this
announcement or in the Prospectus have been and will be registered
under the US Securities Act of 1933 (the "Securities Act") or under
any securities laws of any state or other jurisdiction of the
United States and may not be offered, sold, pledged, taken up,
exercised, resold, renounced, transferred or delivered, directly or
indirectly, within the United States except pursuant to an
applicable exemption from or in a transaction not subject to the
registration requirements of the Securities Act and in compliance
with any applicable securities laws of any state or other
jurisdiction of the United States. There will be no public offer of
any such securities in the United States. Subject to certain
limited exceptions, Provisional Allotment Letters have not been,
and will not be, sent to, and Nil Paid Rights have not been, and
will not be, credited to the CREST account of, any Qualifying
Shareholder with a registered address in or that is known to be
located in the United States. None of the securities referred to in
this announcement or in the Prospectus, nor any other document
connected with the matters discussed in this announcement or in the
Prospectus has been or will be approved or disapproved by the
United States Securities and Exchange Commission or by the
securities commissions of any state or other jurisdiction of the
United States or any other regulatory authority, and none of the
foregoing authorities or any securities commission has passed upon
or endorsed the merits of such securities or documents or the
accuracy or adequacy of this announcement or any other such
document. Any representation to the contrary is a criminal offence
in the United States.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of any offer or
invitation to underwrite, sell, issue, purchase or subscribe for,
or any solicitation to underwrite, sell, issue, purchase or
subscribe for, Nil Paid Rights, Fully Paid Rights or New Shares or
to take up any entitlements to Nil Paid Rights in any jurisdiction.
No offer or invitation to underwrite, sell, issue, purchase or
subscribe for, or any solicitation to underwrite, sell, issue,
purchase or subscribe for, any securities will be made in any
jurisdiction in which such an offer or solicitation is unlawful.
The information contained in this announcement is not for release,
publication or distribution to persons in the United States or
Australia, Canada, Japan or the Republic of South Africa or in any
other jurisdiction where the extension or availability of the
Rights Issue (and any other transaction contemplated thereby) would
breach any applicable law or regulation, and should not be
distributed, forwarded to or transmitted in or into any
jurisdiction, where to do so might constitute a violation of local
securities laws or regulations.
The distribution of this announcement into jurisdictions other
than the United Kingdom may be restricted by law, and, therefore,
persons into whose possession this announcement comes should inform
themselves about and observe any such restrictions. Any failure to
comply with any such restrictions may constitute a violation of the
securities laws of such jurisdiction. In particular, subject to
certain exceptions, neither this announcement nor the Prospectus
(once published) nor the Provisional Allotment Letters (once
printed) should be distributed, forwarded to or transmitted in or
into the United States, Australia, Canada, Japan or the Republic of
South Africa or any other jurisdiction where to do so might
constitute a violation of local securities laws or regulations.
This announcement does not constitute a recommendation
concerning any investor's options with respect to the Rights Issue.
The price and value of securities can go down as well as up. Past
performance is not a guide to future performance. The contents of
this announcement are not to be construed as legal, business,
financial or tax advice. Each Shareholder or prospective investor
should consult his, her or its own legal adviser, business adviser,
financial adviser or tax adviser for legal, financial, business or
tax advice.
Notice to all investors
Goldman Sachs International ("Goldman Sachs") is authorised in
the United Kingdom by the Prudential Regulation Authority (the
"PRA") and regulated in the United Kingdom by the Financial Conduct
Authority (the "FCA") and the PRA. Goldman Sachs is acting as
Financial Adviser (except in connection with its role as
underwriter on the Rights Issue), Sponsor and Joint Global
Co-ordinator to the Company and no other person in connection with
this announcement and will not be responsible to anyone other than
the Company for providing the protections afforded to clients of
Goldman Sachs nor for providing advice to any person in relation to
any matters referred to in this announcement. Each of Barclays Bank
PLC, HSBC Bank plc, J.P. Morgan Securities plc (conducting its UK
investment banking activities as J.P. Morgan Cazenove), Merrill
Lynch International, Mediobanca - Banca di Credito Finanziario
S.p.A., Mizuho International plc and MUFG Securities EMEA plc
(together, with BNP Paribas, the "Underwriters"), is authorised by
the PRA and regulated by the PRA and the FCA in the United Kingdom.
BNP Paribas is authorised and regulated by the European Central
Bank and the Autorité de Contrôle Prudentiel et de Resolution. BNP
Paribas London branch is authorised by the Prudential Regulation
Authority with deemed permissions under the UK Temporary
Permissions Regime. BNP Paribas London branch is subject to
regulation by the FCA and limited regulation by the PRA. Details of
the Temporary Permissions Regime, which allows EEA based firms to
operate in the UK for a limited period while seeking full
authorisation, are available on the FCA's website. The Underwriters
are acting for the Company and are acting for no one else in
connection with the Rights Issue and will not regard any other
person as a client in relation to the Rights Issue and will not be
responsible to anyone other than the Company for providing the
protections afforded to their respective clients, nor for providing
advice in connection with the Rights Issue or any other matter,
transaction or arrangement referred to in this announcement or in
the Prospectus.
None of the Underwriters, nor any of their respective
subsidiaries, branches or affiliates, nor any of their respective
directors, officers or employees accepts any responsibility or
liability whatsoever for the contents of this announcement, (or
whether any information has been omitted from the announcement), or
makes any representation or warranty, express or implied, as to its
accuracy, fairness, completeness or verification or for any other
statement made or purported to be made by it, or on its behalf, in
connection with the Company, the Nil Paid Rights, the Fully Paid
Rights, the Provisional Allotment Letter, the New Shares or the
Rights Issue, whether written, oral or in a visual or electronic
form, and howsoever transmitted or made available, or for any loss
arising from any use of this announcement or its contents or
otherwise arising in connection therewith. Subject to applicable
law, each of the Underwriters accordingly expressly disclaims all
and any liability whether arising in tort, contract or otherwise
(save as referred to above) which it might otherwise have in
respect of this announcement or any such statement. None of the
Underwriters, nor any of their respective subsidiaries, branches or
affiliates, nor any of their respective directors, officers or
employees owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of the Underwriters in connection with the Rights Issue, this
announcement, any statement contained herein, or otherwise.
Information to distributors
Solely for the purposes of the product governance requirements
of Chapter 3 of the FCA Handbook Product Intervention and Product
Governance Sourcebook (the "UK MiFIR Product Governance
Requirements"), and disclaiming all and any liability, whether
arising in tort, contract or otherwise, which any "manufacturer"
(for the purposes of the UK MiFIR Product Governance Requirements)
may otherwise have with respect thereto, the Nil Paid Rights, the
Fully Paid Rights and the New Shares have been subject to a product
approval process, which has determined that they each are (i)
compatible with an end target market of retail investors and
investors who meet the criteria of professional clients and
eligible counterparties, as respectively defined in paragraphs 3.5
and 3.6 of the FCA Handbook Conduct of Business Sourcebook, and
(ii) eligible for distribution through all permitted distribution
channels (the "Target Market Assessment").
Notwithstanding the Target Market Assessment, Distributors
should note that: the price of the Nil Paid Rights, the Fully Paid
Rights and/or the New Shares may decline and investors could lose
all or part of their investment; the Nil Paid Rights, the Fully
Paid Rights and the New Shares offer no guaranteed income and no
capital protection; and an investment in the Nil Paid Rights, the
Fully Paid Rights and/or the New Shares is compatible only with
investors who do not need a guaranteed income or capital
protection, who (either alone or in conjunction with an appropriate
financial or other adviser) are capable of evaluating the merits
and risks of such an investment and who have sufficient resources
to be able to bear any losses that may result therefrom. The Target
Market Assessment is without prejudice to the requirements of any
contractual, legal or regulatory selling restrictions in relation
to the offer. Furthermore, it is noted that, notwithstanding the
Target Market Assessment, the Underwriters will only procure
investors who meet the criteria of professional clients and
eligible counterparties. For the avoidance of doubt, the Target
Market Assessment does not constitute: (a) an assessment of
suitability or appropriateness for the purposes of Chapters 9A or
10A respectively of the FCA Handbook Conduct of Business
Sourcebook; or (b) a recommendation to any investor or group of
investors to invest in, or purchase, or take any other action
whatsoever with respect to the Nil Paid Rights, the Fully Paid
Rights and/or the New Shares. Each distributor is responsible for
undertaking its own target market assessment in respect of the Nil
Paid Rights, the Fully Paid Rights and/or the New Shares and
determining appropriate distribution channels.
Forward--looking statements
This announcement contains forward-looking statements that are
based on current expectations or beliefs, as well as assumptions
about future events. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "will", "may", "should", "would", "could", "is
confident", or other words of similar meaning. Undue reliance
should not be placed on any such statements because they speak only
as at the date of this announcement and, by their very nature, they
are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results, and the
Company's plans and objectives, to differ materially from those
expressed or implied in the forward-looking statements.
There are a number of factors which could cause actual results
to differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are; the impact of the Coronavirus
pandemic, increased competition, the loss of or damage to one or
more key concession and brand relationships, changes in customer
behaviours, the failure of one or more key suppliers, the outcome
of business or industry restructuring, the outcome of any
litigation, changes in economic conditions, currency fluctuations,
changes in interest and tax rates, changes in laws, regulations or
regulatory policies, the failure to retain key management, or the
key timing and success of future acquisition opportunities or major
investment projects.
Forward-looking statements are not guarantees of future
performance and no representation or warranty is made that any
forward-looking statement will come to pass. You are advised to
read the Prospectus when published and the information incorporated
by reference therein in their entirety, and, in particular, the
section of the Prospectus headed "Risk Factors", for a further
discussion of the factors that could affect the Group's future
performance and the industry in which it operates. In light of
these risks, uncertainties and assumptions, the events described in
the forward-looking statements in this announcement may not occur.
In addition, even if the Group's actual results of operations,
financial condition and the development of the business sectors in
which it operates are consistent with the forward-looking
statements contained in this announcement, those results or
developments may not be indicative of results or developments in
subsequent periods. These statements are not fact and should not be
relied upon as being necessarily indicative of future results, and
readers of this announcement are cautioned not to place undue
reliance on the forward-looking statements, including those
regarding prospective financial information.
No statement in this announcement is intended as a profit
forecast, and no statement in this announcement should be
interpreted to mean that underlying operating profit for the
current or future financial years would necessarily be above a
minimum level, or match or exceed the historical published
operating profit or set a minimum level of operating profit.
Other than in accordance with their legal or regulatory
obligations (including under the Listing Rules, the Disclosure
Guidance and Transparency Rules and the Prospectus Regulation
Rules), neither the Company nor the Underwriters nor any of their
respective directors, officers, employees, agents, affiliates or
advisers undertake any obligation to update or revise publicly any
forward-looking statement, whether as a result of new information,
future events or otherwise.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ARIDKOBBABKKQND
(END) Dow Jones Newswires
March 17, 2021 03:05 ET (07:05 GMT)
Ssp (LSE:SSPG)
Historical Stock Chart
From Apr 2024 to May 2024
Ssp (LSE:SSPG)
Historical Stock Chart
From May 2023 to May 2024