SSP Group sees profit at top end of guidance
SSP Group returns to profit as holiday travel recovery boosts owner of Upper Crust and Caffè Ritazza
- SSP runs concessions for big names, including M&S, at airports and train stations
- It made a pre-tax profit of £15.8m in the first half, compared to a loss of £2.3m last year
- Full year core profit rises to £280m and turnover to nearly £3bn
SSP Group returned to profit in the first half and now expects full-year profit to be at the high end of forecasts as the passenger recovery continues.
The company operates concessions for major brands, including M&S, Burger King, Starbucks and Yo Sushi, at airports and train stations around the world.
SSP Group, which also owns Upper Crust and Caffè Ritazza, reported a pre-tax profit of £15.8m for the six months to the end of March, compared to a loss of £2.3m in the same period last year, with an increase in turnover of 64 per cent to £1.3 billion.
SSP carries out concessions for M&S and Burger King at airports and train stations, among others
SSP told investors it started its second half with further sales growth driven by a continued recovery in air and rail traffic, in addition to price increases.
Sales in the US and Europe are surpassing pre-Covid levels, but the UK has seen a slower recovery, with sales still at 94 per cent of pre-pandemic levels, partly due to increased industrial action in the UK Rail network.
Overall, sales in the first six weeks of the second half averaged about 111 percent of 2019 levels.
The group now expects full-year sales and earnings to come close to expectations, shipping SSP Shares up almost 5 percent to 277p in morning trading on Tuesday.
The stock has risen about 17 percent over the past year.
Chief executive, Patrick Coveney, said: “This has been a strong first half for SSP, and continued revenue momentum across the company means we now expect our 2023 performance to be at the high end of our previous assumptions.”
Profit for the full year rises to £280 million, compared to £142 million in the previous year, with sales approaching £3 billion.
The group struggled during the pandemic as travel ground to a halt, but has now benefited from an uptick in the number of people traveling through airports and train stations.
AJ Bell investment director Russ Mold said: “Finally, after a few chaotic years for the company due to the pandemic, SSP is firmly in recovery mode with sales, profits and margins rising.
“We’re not quite there yet on dividends, but the company is hinting it’s only a matter of time before shareholder compensation is reinstated.”