MARKET REPORT: Upper Crust owner rises as travellers boost profits

Shares in Upper Crust owner SSP rose after it swung back into profit and cashed in on a return of passengers jetting off in the skies and hopping on trains.

The FTSE 250 group, which also owns Millie’s Cookies, made a profit of £15.8million in the six months to the end of March, having reported a £2.3million loss during the same period a year ago.

And revenues of £1.3billion were 64.1 per cent higher than 12 months earlier, the firm said.

SSP hailed strong demand in North America, where sales were ahead of pre-pandemic levels, while the UK’s recovery was hindered by rail strikes.

The airline sector was brought to a standstill during the pandemic as strict Covid measures took a toll on the industry.

Bouncing back: Upper Crust-owner SSP made a profit of £15.8m in the six months to the end of March, having reported a £2.3m loss during the same period a year ago

But with SSP encouraged by the pace of recovery in passengers travelling once again, it now expects its sales and profits for the year to the end of September to be at the top end of forecasts.

The group added that sales in the first six weeks of the second half of its financial year were up 11 per cent on 2019 levels as holidaymakers prepare to jet off for summer.

The company also teamed up with Brewdog to bring the craft brewer’s pubs to railway stations and airports across the UK this year, starting with Gatwick. 

Shares gained 3.1 per cent, or 8.2p, to 272.4p.

The FTSE 100 fell 0.1 per cent, or 8.04 points, to 7762.95 and the FTSE 250 lost 0.3 per cent, or 65.03 points, to 19208.31.

Blue-chip property landlords rallied amid hopes of a recovery in property values.

British Land gained 2.6 per cent, or 9.3p, to 365.7p, Land Securities rose 0.8 per cent, or 4.8p, to 636.2p, Segro added 1.3 per cent, or 10.2p, to 825.2p and Hammerson grew by 2.3 per cent, or 0.58p, to 26.02p.

Stock Watch – Watkin Jones

Watkin Jones tumbled to a record low after the housing developer warned around £15million of profit will be delayed until its next financial year.

Tough market conditions have meant the group has chosen not to ‘accelerate pipeline assets on to our balance sheet in readiness for sale’.

Its revenue plunged by a fifth to £153.9million in the six months to the end of March after it completed no new forward sales.

Shares, which floated at 100p in March 2016, plunged 20.3 per cent, or 19.6p, to 76.8p.

RS Group took a hit after it warned that trading has been weaker since April.

The electronics distributor’s shares fell 7 per cent, or 59.6p, to 793.2p.

Analysts at Jefferies said private equity predators could now target the company after its chief executive, finance boss, chief operating officer and head of North America all left in under a year.

Retail stocks sank into the red, with B&M losing 5 per cent, or 24.3p, to 465.7p, Next down 1.3 per cent, or 86p, to 6554p and Frasers Group slipping 4.2 per cent, or 31.5p, to 717p.

Liberum analyst Joachim Klement said traders are worried about inflation remaining higher for longer despite expected falls.

Dowlais, the engineering group that was spun out of Melrose (down 0.5 per cent, or 2.6p, to 477.9p) last month, cheered after its revenue rose 9 per cent to £1.9billion in the first four months of the year.

While sales in its automotive division increased by 11 per cent, revenue was flat year-on-year in the power metallurgy business. 

Despite this, the company reiterated its forecasts for 2023. Shares plunged 7.4 per cent, or 10.6p, to 132.9p.

News of water regulator Ofwat’s investigation into South West Water over leaks and usage data saw shares in the utility firm’s owner Pennon slide 2.7 per cent, or 22p, to 800p.

Drax is planning to push into the US market as it looks to take advantage of President Biden’s tax breaks for green energy.

The power generation group – which said the US had created a ‘supportive investment environment’ following the Inflation Reduction Act – revealed it was aiming to build two power plants in the southern US which it estimated would cost £3.2billion and begin commercial operations in 2030. 

Shares gained 2.2 per cent, or 13.4p, to 635p.

Cranswick, one of Britain’s major food producers, reported higher annual profit and revenue despite taking a hit from industry-wide labour shortages. Shares rose 5.4 per cent, or 170p, to 3310p.