the times | Wednesday May 25 2022 41
Business
Britons are becoming more interested
in fitting insulation and solar panels
and less keen on installing new kitch-
ens and bathrooms as the squeeze on
the cost of living intensifies.
HomeServe said yesterday that there
had been a change of emphasis on its
Checkatrade online platform, with
more people focused on alternative
energy and money-saving projects
such as insulation.
The company, which last week
agreed to a £4.1 billion takeover bid
from Brookfield, the Canadian fund
management group, reported a 15 per
cent increase in underlying pre-tax
profit to £220.3 million for the year to
March.
Its home experts division, which con-
tains Checkatrade, reported its first
profit, while there were mixed results
from its boiler and pipes repairs divi-
sion, with the United States surging but
Britain losing 100,000 customers.
Richard Harpin, 57, founder and chief
Pent-up demand for leisure activities
from people intent on going out after
pandemic lockdowns has driven a
rebound in trade at SSP Group and
prompted its new chief executive to
predict a return to pre-Covid levels of
trade by 2025.
Patrick Coveney, 51, who joined the
transport caterer at the end of March,
said that the business was “recovering
well from a hugely challenging period”,
with revenues already at more than
80 per cent of the levels before the
coronavirus outbreak and with a simi-
lar proportion of its sites now open.
The positive update lifted shares in
SSP, which have been battered by the
pandemic, and they closed last night up
8¼p, or 3.5 per cent, at 244p.
In the first half, revenues continued
to rise, reaching 64 per cent of 2019
levels, and they improved further to
83 per cent in the first six weeks of the
second half as leisure travel returned
and commuters went back to the office.
The group also reported high levels
of contract retention, ahead of histori-
cal levels, while its new business wins
totalled 80 outlets with estimated reve-
nues of £75 million. It opened 50 new
units in the first half.
SSP, once part of Compass Group,
operates 2,700 outlets at 180 airports
and 300 railway stations in 36 coun-
tries. It operates 550 brands, including
its own concepts such as Upper Crust
and Camden Food Co, plus franchises
including Burger King and Starbucks.
Before the pandemic shut most of its
83%
SSP’s revenue against pre-Covid levels
Source: SSP
Householders switch on to insulation
executive, said the transformation plan
for the core British business was
making good initial progress in spite of
a reduction in policyholder numbers
from 1.6 million to 1.5 million. Customer
retention in the UK was up for the first
time in seven years, from 78 per cent to
79 per cent, he said.
A Checkatrade survey found that
online searches for tradespeople
to fit insulation had risen by
61 per cent and for renew-
able energy projects by
59 per cent.
Homeserve sells
insurance for
boiler faults and
leaky pipes via
marketing sent
alongside water
bills to millions of
households. Re-
pairs are done by its
own plumbers and
outside contractors.
The formula was ex-
ported to America, whereHomeServe serves seven million
households and lifted adjusted operat-
ing profit in the year from $137.9 million
to $159.1 million.
Shares in HomeServe were largely
flat yesterday, rising by a penny to
£11.62, still shy of the £12-a-share cash
offer from Brookfield. That bid has the
support of Harpin and his wife, who
own 12.1 per cent of the business.
Analysts said there was an
outside chance of a rival
offer. David Greenall,
at Davy, said there
was potential for a
higher bid from a
buyer that could
extract synergies.
Apax Partners,
the private equity
buyer of Home-
owner Services last
year in a $1.28 billion
deal, “fitted the bill”.Patrick Hosking Financial Editor
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solar panelProfit motive takes over as
Gorillas lays off 300 staff
Ashley Armstrong Retail EditorGorillas plans to lay off 300 people,
cutting its administrative staff numbers
in half, as the German grocery delivery
app shifts its focus from rapid expan-
sion to turning a profit.
The Berlin-based start-up, which was
founded in 2020, has tripled the size of
its business since October, when it
raised €860 million, but it has not been
profitable amid an uncertain economic
outlook.
“Risk has become irritating for inves-
tors and nobody wants uncertainty.
That makes it pretty hard to raise
money right now,” Kagan Sümer, its
chief executive, said. “When we go
public, we want to do it as a profitable
company.”
The model for rapid grocery
deliveries comes with high costs, as the
companies have to pay for thousands of
riders and logistic centres to get crisps,milk, pasta and other items to cus-
tomers swiftly. “That’s why fixed costs
have to come down and the Berlin
headquarters should become the hub,”
Sümer, 44, said, adding that the com-
pany was laying off only administrative
staff and that its 14,000 bicycle-bound
deliverers would not be affected.
He said that Gorillas aimed to focus
on Germany, France, Britain, the Neth-
erlands and the United States, which
make up 90 per cent of its business, and
that it was reviewing options for its
smaller operations in Italy, Spain,
Denmark and Belgium.
Gorillas previously had aimed to
expand to more countries amid hopes
that the business model would grow as
much as meal delivery expanded dur-
ing Covid lockdowns.
However, competition has been
fierce in big cities, such as Berlin, with
rivals such as Flink, DoorDash’s Wolt
and Getir offering similar services.Revival in travel
gives caterer
an appetite for
new openings
Dominic Walsh operations, it had 40,000 workers
serving about 1.5 million customers a
day. Today, SSP says it has about 23,000
employees worldwide, a number that is
growing as it recovers. It has reopened
about 2,200 of its outlets.
During the pandemic, the company
accelerated digitalisation, notably by
expanding the ways in which custom-
ers can order and pay for food and
drink. It also has developed new brands
and concepts, including Soul & Grain, a
grab-and-go artisan coffee shop that is
being tested at London Victoria railway
station with an accent on freshness and
nutritional balance.
It expected sales in the second half to
reach 80 per cent to 85 per cent of pre-
Covid levels, with full-year revenues of
£2 billion to £2.1 billion. Jonathan
Davies, the deputy chief executive,
forecast an underlying margin of 5 per
cent to 6 per cent, slightly ahead of
analysts’ forecasts, claiming that cost
inflation had “not really bitten to date”.
The group said it had a pipeline of
about 230 new units, which it expects to
open over the next two years, ulti-
mately adding a further £300 million of
sales. Including those, the net gains
since the end of the 2019 financial year
are expected to add about £500 million
to annual revenue by 2025.
In the six months to the end of
March, SSP reported a 213 per cent
jump in revenues to £803.2 million,
with underlying earnings swinging
from a loss of £110.3 million to a profit of
£14.7 million. At a pre-tax level, losses
narrowed from £299.7 million to
£2.3 million, or £55.3 million on an
underlying basis, and there is no
dividend.
SSP said that the strong start to the
second half had been led by continental
Europe and North America, while in
the UK revenues were back to 82 per
cent of 2019 levels, with the air sector
boosted by strong leisure demand.
T
he boss of one of
the Britain’s
largest food
producers has
renewed his
calls for more
government support for
the pig industry (Ashley
Armstrong writes).
Adam Couch, 53, chief
executive of Cranswick,said that the industry was
under “severe and
unsustainable strain”
from “the rapid
escalation in feed costs,
together with other
inflationary pressures
and the well-publicised
shortage of skilled
butchers, resulting
directly from the
government’s post-Brexit
immigration policy”.
Couch said that he was
disappointed with the
government’s response so
far. Last year Boris
Johnson suggested that a
pig cull did not matter
as the animals werekilled for “bacon
sandwiches”.
Couch has said that the
government should drop
its bioethanol production
targets — part of Britain’s
plan to reach net zero —
because the use of wheat
was further reducing
availability of the grain
that was urgently needed
in the food supply chain.
Cranswick said that the
price of cereals, which
account for between
60 per cent and 70 per
cent of the cost of
growing an animal, had
risen by more than 50 per
cent since Russia’sinvasion of Ukraine. It
said that the cost
pressures meant pig
prices would have to rise
and it was working with
supermarkets on new
compensation
mechanisms for its
farmers.
This month Cranswick
recalled hundreds of its
chicken products after
salmonella was detected
at its site in Hull, leading
to shortages at Tesco,
Sainsbury’s, Waitrose,
Costa, Lidl, Aldi and
Greggs. Cranswick said
that while the cost of the
event could not be
reasonably estimated yet,
“it is expected that the
impact will not be
material to the group”.
Despite the wider
challenges, Cranswick
recorded a 5.8 per cent
rise in sales to £2 billion
for the year to March 26,
while pre-tax profit rose
by 13.2 per cent to
£129.9 million. It said its
guidance for the year was
unchanged. The shares
closed 24p, or 0.8 per
cent, lower at £31.34.
6 Greencore warned that
customers faced higher
prices as Britain’s biggest
sandwich maker said it
was “fully committed to
recovery of the additional
inflationary challenges”.
Greencore, which has
named Dalton Philips,
the former boss of
Morrisons, as its chief
executive, said that its
sales were up by a third
to £770.8 million in the
six months to March 25
as the return of travel and
office working lifted
demand for food-to-go.
Gary Kennedy, the
company’s executive
chairman, said that
first-half revenues being
above pre-Covid levels
was “a great
achievement”, given
travel restrictions, supply
challenges and inflation.Cranswick
demands
support for
pig industry
The price of cereals, which
account for more than
60 per cent of pig feed, have
risen by half this yearSUSAN WILSON/GETTY IMAGES