Upper Crust Under Pressure: Activist Investor Stirs the Pot at SSP Group

Let's dish out the latest scoop on SSP Group, the big cheese behind Upper Crust:

Irenic Capital Management, a New York-based activist investor, is hungry for change at SSP. They've already gobbled up about 2% of the company and are still building their stake. Irenic thinks SSP's profits could rise like a perfect soufflé, potentially doubling the share price if they can turn up the heat on profitability.

SSP's been in a bit of a pickle since the pandemic hit. The company, which also owns Ritazza and serves up Burger King and Marks and Spencer outlets in travel hubs, has found the recovery in rail travel to be slower than molasses. Their shares closed at 150p recently, giving SSP a market value of £1.2 billion. That's no small potatoes!

Patrick Coveney, SSP's top chef (CEO), admitted in December that while they've made progress in their post-COVID recipe for success, it hasn't been cooking as fast as they'd hoped. Their operating profit margins were at 6% last year, down from a meatier 8% in 2019. They reported operating profits of £219.2 million on sales of £3.4 billion last year - not exactly chicken feed, but there's room for improvement.

Irenic, co-founded by Adam Katz and Andy Dodge, manages a fund worth around $1.4 billion. They've got a track record of stirring the pot in companies they invest in. For instance, they helped cook up changes at The Restaurant Group last year, which ended up being served to Apollo Global Management for £506 million.

While SSP's European business might be feeling the heat, their Indian joint venture is the cream of the crop. They're planning to list this venture, called TFS, later this year. Investors are salivating over this move, expecting it to be valued at a mouth-watering £1 billion.

It's definitely a situation to watch with a hungry eye. These changes could lead to a full-course makeover for SSP Group, potentially even setting the table for a private equity takeover. We'll have to see if Irenic's recipe for success will be SSP's secret sauce or if it'll leave a bad taste in their mouth!

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