REG - SSP Group PLC - Q4 Trading Update

SSPAnnouncement

Thu 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20251009:nRSI6452Ca&default-theme=true

RNS Number : 6452C  SSP Group PLC  09 October 2025

 

  LEI:213800QGNIWTXFMENJ24

9 October 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Q4 TRADING UPDATE

ON TRACK TO DELIVER FULL-YEAR EPS IN LINE WITH MARKET EXPECTATIONS

 £100m SHARE BUYBACK LAUNCHED

 

SSP Group plc ("SSP" or "the Group"), a leading operator of restaurants, bars,
cafes and other food and beverage outlets in travel locations across 38
countries, issues a Trading Update for both the final quarter ("Q4") and its
financial year ended 30 September 2025 ("FY25").

SSP remains on track to deliver earnings per share for the full-year in the
middle of the previously published planned range(1) and in line with current
market expectations despite a moderation in the growth of passenger numbers in
the second half of the financial year. In addition, SSP today announces the
initiation of a £100m share buyback, consistent with our capital allocation
strategy, reflecting our healthy balance sheet position and highlighting the
Board's confidence in our prospects into FY26.

Performance headlines (2)

·    FY revenue of c.£3.7bn, up c.8% YoY, with FY operating profit
expected to be c.£230m, up c.11% YoY, and with operating margin of c.6.2%, up
c.20bps (all on a constant currency basis)

·     At actual exchange rates, FY EPS expected to be c.11.5p, a
year-on-year increase of 15%, including a lower-than-expected effective tax
rate and interest charge. On a constant currency basis, FY EPS expected to be
c.12.3p, in the middle of the planned range for the year

·     Leverage (Net Debt/ EBITDA) expected to reduce from 2.2x at the half
year to approximately 1.6x (at actual FX rates) at year-end driven by strong
free cash flow generation including planned lower capital spend and improved
working capital performance

·    With leverage now returning to the lower end of our medium-term
target range of 1.5-2.0x as planned and given our confidence in our cash
generation prospects into FY26, we are today initiating a share buyback of
£100m

·     Anticipate FY Group ROCE strengthening from last year's result of
17.7% (pre-tax)

·    Q4 revenue growth of c.4% YoY (on a constant currency basis),
reflecting growth in Asia PAC&EEME, North America and UK , offset by lower
sales in Continental Europe

·     Pursuing further performance improvement initiatives into 2026
including; driving profitable sales growth, improving profitability in our
French and German markets, delivering cost efficiencies across the Group,
driving returns on investment from our recent growth initiatives and an
enhanced focus on free cash generation

 

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

"We have delivered a resilient Q4 performance against an unsettled
macro-economic and softer demand environment in some of our key travel
markets. Our UK and Asia Pacific businesses have traded particularly well and,
taken in aggregate, our performance in the quarter across the portfolio leaves
us on track to deliver earnings per share for FY25 in line with current market
expectations. In addition, facilitated by our strong cash generation in the
second half and given our confidence in the outlook for next year, we are
pleased to be announcing a £100m share buyback programme today, in line with
our capital allocation priorities.

While our strategy for enhanced financial returns is starting to deliver, we
remain focused on strengthening performance across the group. In particular,
we recognise the imperative to do so rapidly in France and Germany. While we
have made good progress with many of the initiatives that we have underway,
more still needs to be done. We are working at pace to accelerate our actions
as we enter the next financial year."

Q4 revenue performance

Group sales in Q4 (1 July to 30 September 2025) were up 4% year-on- year, on a
constant currency basis, with like-for-like sales growth of 2% and net
contract gains of 3%. Group sales also included an impact of (1)%, principally
from the previously announced phased exit of our German Motorway Services
business.

 Q4 sales             vs Last Year                             vs Last Year (actual FX rates)

                      (constant FX rates)
 Region               LFL     Net Gains  Other(3)  Total       Total
 N.America            (2)%    6%         -         4%          0%
 C.Europe             1%      0%         (4)%      (3)%        (1)%
 UK & I               6%      1%         -         7%          8%
 APAC & EEME          6%      8%         (2)%      12%         9%
 Group                2%      3%         (1)%      4%          3%

In North America, sales grew by 4% year-on-year, on a constant currency basis,
including 6% net gains, as we expanded our footprint to 56 airports, and a
like-for-like sales decline of (2)%, reflecting a continuation of lower
passenger numbers across our network of airports in recent months.

In Continental Europe, sales were (3)% lower year-on-year, reflecting the
impact from the ongoing phased exit from our unprofitable MSA units in
Germany, with the complete exit from this channel to be substantially complete
in H1 FY26. Like-for-like sales were 1%, despite weak consumer sentiment and
spend levels, most particularly in our French and German rail businesses.
Underlying net gains were also flat year-on-year, reflecting our
prioritisation of organic investment into our other higher returning regions.

In the UK & Ireland, sales rose by 7%, sustained by strong like-for-like
sales, particularly in the Rail channel, and despite the London Underground
strike which disrupted passengers for a week in early September and which
impacted our like-for-like sales growth by c.(0.5)%.

In APAC and EEME, sales grew by 12%, driven by 8% net gains and by strong
like-for-like growth in Australia and Malaysia. However, this was partially
offset by lower-than-expected growth in India due to temporary reductions in
air capacity and the Middle East following the impact of geopolitical tensions
across the regions earlier in the summer.

Full year 2025 sales and profit expectations(2)

For the full year, on a constant currency basis, group revenue was c.£3.7bn,
up c.8% year-on-year, comprising like-for-like sales growth of c.4%, net
contract gains of c.4%, a contribution from acquisitions of c.2% and a
combined impact of (2)% principally from the previously announced staged exit
of our German Motorway Services business and the deconsolidation of our joint
venture with Adani Airport Holdings Limited in India.

On a constant currency basis, we are on track to deliver operating profit of
c.£230m, up c.11% year-on-year, with a corresponding margin of c.6.2%, up
c.20bps and with EPS of c.12.3p (in the middle of the previously announced
planned range of 11.5p-13.5p).

At actual exchange rates, full year EPS, at c.11.5p, is expected to be in line
with current market expectations, including a lower-than-expected effective
tax rate and interest charge.

As a result of sales growth and our focus on cost efficiency, we expect to see
operating profit growth in all regions. However, while performance in
Continental Europe has gained momentum, we do not expect profitability for the
region in the year to be where we had originally planned it to be.
Specifically, the scale of changes that we chose to make and the interventions
required to improve the performance trajectory in our French and German
businesses have been greater than initially anticipated, not helped by the
challenging market and channel environment in both of those markets.  We now
expect our FY25 operating profit margin for the region to be c.2.0% (up from
1.5% in the prior year). In FY26, as a result of our actions taken in FY25 in
combination with  new initiatives underway, we are planning for operating
profit margin in the region to exceed 3.0% and are confident in our plan to
build towards a 5% operating margin in the medium-term. Further initiatives
already in-flight in the region include; additional cost reductions,
substantial rent restructuring and further reduced capital spend. More detail
on these initiatives will be shared at the Preliminary Results in December.

Full year cash flow and leverage expectations

As a result of a strong anticipated second half cash performance, driven by
working capital initiatives and after disciplined capital investment (c.£220m
for the full-year), net debt is expected to be below £600m, leaving leverage
at approximately 1.6x net debt/EBITDA, towards the lower end of our
medium-term target range of 1.5-2.0x.

As a result, and given our confidence on cash generation into FY26, in line
with our capital allocation priorities, we are today launching a £100m share
buyback programme.  More detail can be found in a separate press release also
published today.

Full year 2026 expectations(2,4)

While there remains a substantial level of uncertainty in the demand outlook
across some travel markets, our actions to enhance operational delivery and
tighten our cost base will enable us to make good progress on earnings,
cashflows and returns into FY26. Progress will be underpinned by the full year
effect of a substantial group-wide overhead cost reduction programme that was
actioned in the second half of FY25 and the anticipated benefit of the actions
we are taking to improve profitability in France and Germany. As a result of
these plans, on a constant currency basis, we currently expect to deliver EPS
for FY26 within the current range of market expectations(5).

We continue to expect that our total level of capital expenditure in FY26 will
be less than £200m, with growth capex consistent with an expected level of
net gains (excluding MSA site exits) in the year of c.2%.

Today's conference call

A conference call with Patrick Coveney, CEO, and Geert Verellen, CFO, will be
held at 8.00am (UKT) today, and details of how to join can be accessed at
https://webcasts.foodtravelexperts.com/results/tradingupdate2025

2025 full year results announcement

The Group's results for the year ending 30 September 2025 are expected to be
released on 4 December 2025.

 

 

 

 

Notes

1.   Full year expectations vs planning assumptions

                                             Constant FX rates                            Actual FX rates
                           FY24              FY25 Planning Assumptions  FY25              FY25 Planning Assumptions  FY25

                           Actuals                                      Expectation                                  Expectation
 Revenue (£bn)             3.4               3.7-3.8                    c.3.7             3.6-3.7                    3.6
 Operating profit (£m)     206               230-260                    c.230             220-250                    c.220
 EPS (p)                   10.0              11.5-13.5                  c.12.3            10.8-12.8                  c.11.5

2.   On an underlying, pre-IFRS 16 basis.

3.   'Other' comprises impact from the staged exit of the German MSA
business and the loss of reported sales in India, where these are now
classified as associate sales and no longer consolidated.

4.   If the current spot rates (as at 30 September 2025) were to continue
through 2026, we would expect a negative currency impact on revenue and
operating profit of approximately (0.3)% and (1.6)% compared to the average
rates used for 2025.

5.   On 3 October, the range of analyst expectations for EPS in FY26 was
12.9p to 13.9p (excluding one outlier).

 

This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of English law by
virtue of the European Union Withdrawal Act 2018 (MAR). The person responsible
for arranging the release of this announcement on behalf of the Company is
Fiona Scattergood, Group General Counsel and Company Secretary.

 

 

CONTACTS

Investor enquiries

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

+44 (0) 7980 636214

E-mail: sarah.roff@ssp-intl.com

 

Media enquiries

Rob Greening / Russ Lynch, Sodali & Co

+44 (0) 207 250 1446

E-mail: ssp@sodali.com (mailto:ssp@sodali.com)

 

 

NOTES TO EDITORS

About SSP

SSP Group plc (LSE:SSPG) is a global leading operator of food and beverage
outlets in travel locations employing around 49,000 colleagues in over 3,000
units across 38 countries. We specialise in designing, creating and operating
a diverse range of food and drink outlets in airports, train stations and
other travel hubs across six formats: sit-down and quick service restaurants,
bars, cafés, lounges, and food-led convenience stores. Our extensive
portfolio of brands features a mix of international, national, and local
brands, tailored to meet the diverse needs of our clients and customers.

Our purpose is to be the best part of the journey, and we are committed to
delivering leading brands and innovative concepts to our clients and customers
around the world, focusing on exceptional taste, value, quality and service.
Sustainability is crucial for our long-term success, and we aim to deliver
positive impact for our business while uniting stakeholders to promote a
sustainable food travel sector.

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

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTMPBTTMTMMTRA