REG - SSP Group PLC - Third Quarter Trading Update

SSPAnnouncement

14/07/2022 07:00

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RNS Number : 4133S  SSP Group PLC  14 July 2022

LEI: 213800QGNIWTXFMENJ24

14 July 2022

SSP GROUP PLC

THIRD QUARTER TRADING UPDATE

SSP Group plc, a leading operator of food and beverage outlets in travel
locations worldwide, issues a Trading Update for the third quarter of its
financial year ending 30 September 2022, covering the period from 1 April to
30 June 2022.

Group

At the Group's Interim Results on 24 May, we reported that revenue had
averaged 83% of 2019 levels for the first six weeks of the third quarter.
Since then, revenue has continued to strengthen, running at 89% of 2019 levels
in the following seven weeks, leaving revenues at 87% of 2019 levels for the
third quarter as a whole. This includes a benefit from net gains and pricing
compared to the same period in 2019.

Our revenue performance has been driven by an ongoing recovery in passenger
numbers and has also benefitted from longer passenger dwell times in some
markets.  The recovery has been led by domestic and leisure travel in both
Air and Rail.  Rail commuter travel continues to recover well, albeit at a
slower pace than leisure travel.

Geographically, we have seen a strong recovery across all divisions, led by
Continental Europe, where sales in the third quarter averaged 93% (of 2019
levels), and North America, averaging 91%. In the UK, sales averaged 82% for
the quarter, driven by a further strengthening of sales in Air, whereas
trading in Rail was impacted by the recent industrial action. Encouragingly,
we have seen a good recovery in the Rest of the World, where sales averaged
75%, with strong performances in India, Australia and Thailand. In China and
Hong Kong, passenger travel remains at very low levels, reflecting the ongoing
travel restrictions.

For the nine-month period from 1 October 2021 to 30 June 2022, total Group
revenues averaged 72% of 2019 levels.

Outlook

Whilst there remains considerable uncertainty in the macroeconomic and
geopolitical backdrop, we are well positioned to benefit from the continued
recovery of the travel sector, notwithstanding the current challenges of
airport disruption, labour shortages and industrial action across certain air
and rail markets.

In common with the entire hospitality sector, we continue to face widespread
and increasing inflationary pressures impacting our supply chain, labour and
energy costs, and these are anticipated to persist well into next year.
However, we are confident in our ability to manage these pressures through
productivity and pricing initiatives and expect to mitigate the impact on
profit, whilst sustaining the positive momentum in consumer demand.

Our medium-term expectation for a recovery of the LFL business to 2019 levels
of profitability remains unchanged. As previously reported, by 2025 our
pipeline of new contracts is expected to add approximately £500m to revenues
compared to 2019. As the business continues to recover, we expect the
mobilisation of this pipeline to accelerate. The anticipated EBITDA
contribution from new unit openings will, as normal, include the impact of
pre-opening costs.

For the current year, based on our performance to date and the current
strength of the travel recovery, we now expect to deliver sales in the region
of £2.1bn and EBITDA margin (on a pre-IFRS 16 basis) in the region of 6%,
which is at the upper end of our previous full year guidance range.

 

Currency

Trading results from outside the UK are converted into Sterling at the average
exchange rates for the period. The overall impact on the revenue % of 2019 of
the movement of foreign currencies (principally the Euro, US Dollar, Swedish
Krona, and Norwegian Krone) during the first three quarters of 2022 compared
to the 2019 average was (1.5)%. If the current spot rates were to continue for
the rest of 2022, we would expect a negative effect for the full year of
around (1.6)%.

CONTACTS

Investor and analyst enquiries

Sarah John, Corporate Affairs Director, SSP Group plc

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

On 14 July 2022: +44 (0) 7736 089218

Thereafter: +44 (0) 203 714 5251

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 concessions in travel
locations, operating restaurants, bars, cafés, food courts, lounges and
convenience stores in airports, train stations, motorway service stations and
other leisure locations. We are present in 35 countries around the world and
have a portfolio of more than 550 international, national and local
brands.

 

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

 

 

 

 

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