Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
SSP Group [LON:SSPG], the operators of dining and retail outlets across transport hubs worldwide, has had a particularly rough ride through the COVID pandemic. With the underlying infrastructure as good as shut down and no ability to pivot into online sales, revenues have been hit hard and that comes through in the full year results covering the period to September 30th which are out this morning. Revenues are down by almost 50%, turning last year’s underlying profit of £212m to a £364m loss, although the company notes that it still has a strong liquidity position with over £500m on hand. The company does claim to have turned a corner however with sales in the last quarter climbing and is confident that demand for travel will return, helping support the outlook.
Half year results from TalkTalk [LON:TALK], again for the period to September 30th, are out today. The company saw sales dip in the first quarter but the recovery has been brisk with Q2 sales almost back at expected levels. The economic fall-out of COVID does present some bad debt risk for utility companies like this and also for consumer’s ability to trade up to value-add products. Full year earnings guidance has been withdrawn.
There’s a trading update from Avon Rubber [LON:AVON] out today, which notes that business for the new financial year is broadly in line with expectations. However the note also cautions of contract delays for body armour products following testing failures, pushing back the delivery schedule into the first half of FY22. Shares in the company have had a very good 2020, but profit taking off the back of the latest results was evident. Could this news trigger further losses?
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