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REG - SSP Group PLC - Trading Statement and US Investor Event

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RNS Number : 4718D  SSP Group PLC  21 June 2023

LEI: 213800QGNIWTXFMENJ24

21 June 2023

SSP GROUP PLC

TRADING UPDATE & INVESTOR EVENT SHOWCASING THE STRATEGY TO DRIVE

GROWTH AND RETURNS IN NORTH AMERICA

SSP Group plc ("SSP" or "the Company"), a leading operator of food and
beverage outlets in travel locations worldwide, will host an investor and
analyst event in New York from 8am EDT (1pm BST) today, providing further
detail on our strategy, including an in-depth overview of our North American
business.  SSP also provides a Trading Update for the first ten weeks of the
second half of the financial year, covering the period from 1 April to 11 June
2023.

Trading Update

For the first ten weeks of the second half of FY2023, revenue was 110% of 2019
levels. Improving underlying trading momentum following the first six weeks
trading as presented at our Interim Results was offset by the impact of
foreign exchange rates, particularly in relation to the Euro, and the impact
of industrial action affecting UK Rail. This revenue performance includes the
benefit from net contract gains, as we accelerate the mobilisation of our
significant pipeline, in addition to price increases compared to the same
period in 2019.

The strongest performing region remains North America, where revenues were at
123% of 2019 levels, reflecting the growth of domestic air travel and the
scale of net gains in the region. As we approach the peak summer trading
period, in Continental Europe revenues were at 114%, driven by a strong
performance across our Air business and despite being held back by currency
movements and industrial action. In the Rest of the World, revenues rose to
115% as we saw further improvements in passenger numbers in Asia led by
domestic Air travel. In the UK and Ireland, sales strengthened to 94%,
reflecting strong Air sales, despite the impact of ongoing industrial action
on the UK Rail sector.

Our strong momentum in extending and renewing contracts as well as winning new
business has been maintained in the second half to date.

Midfield Concessions Update

The acquisition of the units at six of the seven Midfield Concessions airports
is now complete, which is slightly earlier than originally anticipated.  In
the FY2023 financial year, the Midfield Concessions business will now deliver
a modest level of sales benefit with the underlying operating profit benefit
broadly offset by acquisition and integration costs.

Investor Event

At today's event there will be presentations from the Group and North American
executive teams, followed by a tour of Terminal 4 at John F. Kennedy
International Airport.

Patrick Coveney, Group CEO, and Jonathan Davies, Deputy CEO and CFO, will
describe how SSP's economic model will deliver long-term sustainable value for
shareholders through accelerated revenue growth, profit conversion, cash
generation and capital allocation. Our North American team, led by regional
CEO Michael Svagdis, will detail the positive industry outlook for the region
and outline why we believe SSP America is well-placed to accelerate our growth
in this market. The event will also set out how SSP's business model and
capabilities, including digital, automation and menu engineering, are driving
stronger sales and profit performance.

We will outline a medium-term financial framework for sustainable growth,
highlighting:

·    Stronger sales growth resulting from our pivot to structurally higher
growth markets (principally N. America and Asia Pacific) and an increasing
level of investment in net new contract wins in these regions

·    Sustainable operating margin enhancement benefitting from operating
leverage (driven by revenue growth) in addition to our re-vitalised efficiency
programme and pricing initiatives mitigating inflationary cost pressures

·    Sustainable medium-term earnings growth driven by strong operating
profit growth, with minorities continuing to grow in line with revenue growth
in countries with JV partnerships

·    Capital investment funded from operating cashflow, underpinned by
high returns on capital projects, with 3-4 year discounted cashflow paybacks,
in line with historical performance

·    Balance sheet deleveraging, the pace of which will be determined by
the scale of new business investment

·    Anticipation of the re-instatement of the ordinary dividend with a
target payout ratio of c.30-40% and surplus cash returned to shareholders in
line with our capital allocation framework

Copies of the materials from today's event will be available on our website at
www.foodtravelexperts.com/investors (//www.foodtravelexperts.com/investors)
.

Outlook

With the earlier than anticipated completion of the acquisition of the
Midfield Concessions business and the continuation of strong trading momentum,
our expectation remains for revenue and EBITDA (underlying pre-IFRS 16) to be
at the upper end of the range of c.£2.9bn-£3.0bn and c.£250m-£280m
respectively for FY2023, and for a corresponding EPS (underlying pre-IFRS 16)
in the range of 7.0-7.5p. We are also increasingly confident in the delivery
of our planning assumptions for FY2024, namely revenues in the region of
£3.2-3.4bn, with a corresponding EBITDA (underlying pre-IFRS 16) in the
region of £325-£375m.

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

"We are pleased to report that the strong momentum across our business has
continued into the second half of the year. The strongest regional revenue
performance continues to be in North America, reflecting both the growth in
domestic air travel as well as the scale of our net gains in the region.

Our acquisition of the Midfield Concessions business in the USA, which
includes 40 units across seven airports, has now largely completed, adding to
our excitement about the prospects for our North American business. We look
forward to sharing that excitement with investors and analysts at today's
event in New York and, more broadly, to providing further detail on our plans
to deliver long-term sustainable growth for all of our stakeholders."

 

Reporting dates

SSP expects to provide an FY2023 pre-close Trading Update at the end of
September.

 

CONTACTS

Investor and analyst enquiries

Sarah John, Corporate Affairs Director, SSP Group plc

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

On 21 June 2023: +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 outlets in travel locations
worldwide, with c.37,000 colleagues in over 600 locations across 36
countries.  We operate sit-down and quick service restaurants, cafes, lounges
and food-led convenience stores, principally in airports and train stations,
with a portfolio of more than 550 international, national and local brands.
These include our own brands (such as UrbanCrave, which brought the first
"street eats" concept to airports in the US, Nippon Ramen, a noodle and
dumpling concept in the Asia Pac region, and Juniper, a premium bar in the UK)
as well as 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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