REG - SSP Group PLC - Q1 Trading Update

SSPAnnouncement

30/01/2024 07:00

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RNS Number : 2843B  SSP Group PLC  30 January 2024

 
 

  LEI:213800QGNIWTXFMENJ24

30 January 2024

Q1 Trading Update

"Strong start to the year with encouraging trading momentum and progress on
strategic initiatives"

SSP Group plc ("SSP" or "the Group"), a leading operator of restaurants, bars,
cafes and other food and beverage outlets in travel locations across 36
countries, issues a Trading Update for the first three months of its 2024
financial year, covering the period from 1 October 2023 to 31 December 2023.

Group performance

The new financial year has started well with Group sales in the first quarter
of £788m, up 21.2% on last year on a constant currency basis. Like-for-like
sales growth of 14.3% reflected the further recovery of passenger numbers as
well as the strength of our customer proposition and operational execution.
Net contract gains of 6.9% were in line with expectations, as we mobilise our
extensive secured pipeline, and include a contribution from acquisitions of
2.2%. Since the close of the first quarter, we have continued to see good
trading momentum, notwithstanding the impact from industrial action which is
expected to persist in both Continental Europe and the UK throughout the
second quarter.

Regional performance

We saw robust trading led by leisure travel demand across all regions with the
strongest performances continuing to be in North America and APAC & EEME,
where we operate with joint venture partners. In North America, sales grew by
30.5% year-on-year, on a constant currency basis, with a strong like-for-like
performance, up 10.2%, complemented by net gains of 20.3%, which included a
c.10% benefit from the acquisition of the Midfield Concessions business (with
the final airport transferring in November 2023). In Continental Europe, sales
grew by 13.3% year-on-year, on a constant currency basis, with a particularly
strong performance in Spain. In the UK, sales increased by 22.8%, with a
strong like-for-like performance, up 17.1%, reflecting good passenger numbers
in the air sector and further improvement in rail passenger volumes as
commuters continued to return to working in offices, as well as a lower
incidence of industrial action compared with last year. In APAC and EEME,
sales rose by 25.2% on a constant currency basis, as we saw further
improvements in passenger numbers across the Asia Pacific region, most notably
in India.

 

                      £m         vs Last Year                     vs Last Year

                                 (constant FX rates)              (actual FX rates)
 Region               Total      LFL      Net Gains  Total        Total
 N. America           186        10.2%    20.3%      30.5%        23.5%
 C. Europe            282        11.5%    1.8%       13.3%        11.0%
 UK & ROI             207        17.1%    5.7%       22.8%        22.7%
 APAC & EEME          113        23.4%    1.8%       25.2%        17.3%
 Group                788        14.3%    6.9%       21.2%        17.7%

New business activity

Strong organic growth momentum has been maintained into the new financial
year. We have continued to make good progress extending and renewing contracts
as well as winning new business, including in North America, Thailand and
India, to augment our already strong pipeline.  As announced in December
2023, we are also further expanding our presence in Saudi Arabia, having
signed a new contract with Jeddah Airport to operate three food and beverage
packages, representing a total of 26 outlets, for an initial duration of
between five and seven years.

In December 2023, we acquired ECG Ventures Limited in Canada, which will
complement our current operations at Calgary and Edmonton Airports.

Outlook

While we face into macroeconomic and political uncertainty, we believe that
demand for travel will remain resilient and the industry is well set for both
short-term and long-term structural growth. The new financial year has started
well, with revenue momentum being maintained and inflationary pressures on
operating costs being mitigated through our ongoing productivity and pricing
initiatives.

As a result of our current trading performance, our expectations for FY24
remain in line with the planning assumptions outlined at our Preliminary
Results on 5 December 2023.  We continue to plan for like-for-like sales
growth for the full year of between 6% and 10%, net contract gains in the
region of 5% (with a further contribution of c.2% from acquisitions),
underlying EBITDA within the range of £345-£375m and underlying operating
profit within the range of £210-235m, all stated on a pre-IFRS 16 basis, at
constant currency based on average rates for 2023.  The currency impact on
these metrics, if current spot rates were to continue through 2024, would be
broadly unchanged since our Preliminary Results and would represent a
translation impact only.

Commenting on the performance, Patrick Coveney, CEO of SSP Group, said:

"I am pleased with the good start that SSP has made to the new financial year.
There continues to be encouraging momentum in our key growth markets of North
America and Asia Pacific and we have also delivered double-digit like-for-like
growth in our more established markets of the UK & Ireland and Continental
Europe. Global demand for travel continues to grow and we have a strong
pipeline of secured new contracts around the world. This, combined with our
constantly improving customer proposition and our proven ability to mitigate
inflationary pressures, means that we remain confident in our prospects for
the balance of FY24 and beyond."

Annual General Meeting

The Group's Annual General Meeting will be held today at 10:00am at the
offices of Travers Smith LLP, at 10 Snow Hill, London, EC1A 2AL.

 

2024 Half Year results announcement

The Group's results for the half year ending 31 March 2024 are expected to be
released on 21 May 2024.

 

ENDS

 

CONTACTS

Investor and analyst enquiries

Sarah John, Corporate Affairs Director, SSP Group plc

Sarah Roff, Group Head of Investor Relations, SSP Group plc

On 30 January 2024: +44 (0) 7736 089218 / +44 (0) 7980 636214

E-mail: sarah.john@ssp-intl.com (mailto:sarah.john@ssp-intl.com) /
sarah.roff@ssp-intl.com

 

Media enquiries

Rob Greening / Nick Hayns

Powerscourt

+44 (0) 207 250 1446

E-mail: ssp@powerscourt-group.com

 

NOTES TO EDITORS

About SSP

SSP is a leading operator of food and beverage outlets in travel locations
worldwide, with c.42,000 colleagues in over 600 locations across 36
countries.  We operate casual dining and quick service restaurants, cafes,
lounges and food-led convenience stores, principally in airports and train
stations, with a portfolio of around 550 international, national and local
brands. These include many of our own brands (such as UrbanCrave, which
brought the first "street eats" concept to airports in the US, and Nippon
Ramen, a noodle and dumpling concept in the APAC region) as well as many
franchise brands (such as M&S, Starbucks and Burger King).

Our purpose is to be the best part of the journey, and this is underpinned by
our aim to bring leading brands and innovative concepts to our clients and
customers around the world, with an emphasis on great value, taste, quality
and service - using digital technology to boost efficiency.

www.foodtravelexperts.com (http://www.foodtravelexperts.com)

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