SSP shares surge 11% as Upper Crust owner capitalises on leisure travel boom

SSP Group Shares jumped on Wednesday as a surge in leisure travel helped the company deliver strong revenue growth across all regions.

On Wednesday afternoon they rose 11 percent to 173.9p, becoming the biggest gainer in the FTSE 250.

SSP, which owns brands focused on train station and airport food such as Upper Crust and Caffe Ritazza, reported sales rose 16 percent at constant exchange rates in the three months to June.

Like-for-like sales rose 6 percent, thanks to higher air passenger numbers and fewer strikes among British rail workers.

Both the contract wins and the acquisitions each generated an additional 5 percent revenue growth for the London-based company.

About half of SSP’s 27 percent revenue growth in North America came from the acquisitions of Mack II, Midfield Concession Enterprises and ECG Ventures.

The group also benefited significantly from the acquisition of Airport Retail Enterprises, a leading Australian airport bar and restaurant company in the Asia Pacific market.

After the performance, SSP said it was “well positioned” for the peak summer season.

In May, CEO Patrick Coveney said the Olympic Games in Paris and the European Football Championship in Germany should boost SSP sales in mainland Europe this summer.

SSP has also maintained its annual forecast, which includes revenue of £3.4bn to £3.5bn and underlying operating profit of £210m to £235m.

In the last financial year, the company’s turnover rose by more than a third to £3 billion, while pre-tax profits rose 250 per cent to £88 million.

Contract extensions were also secured at popular travel hubs such as Heathrow and Gatwick airports.

SSP employs 43,000 people and has approximately 600 locations, including Burger King and Starbucks, in 37 countries.

The company began in 1961 as the catering division of Scandinavian airline SAS Group. Three decades later, it was acquired by Compass Group, which later sold it to private equity giant EQT.

When EQT decided to list SSP on the London Stock Exchange in 2014, the company was valued at almost £1 billion.

Russ Mould, investment director at AJ Bell, said: “SSP, an airport and rail station concessionaire, has had a tough time since the pandemic, but today’s update shows tangible progress is being made.”

SSP shares are still down more than two-thirds since the start of the Covid-19 pandemic.