UK/INTERNATIONAL. In a trading update, leading travel food services company SSP Group has said that revenue for the first ten weeks of its second half – from 1 April to 11 June – reach 110% of 2019 levels.
Improving underlying trading momentum following the first six weeks 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 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 the peak summer trading period approaches, in Continental Europe revenues were at 114%, driven by a strong performance across the Air business and despite being held back by currency movements and industrial action.
In the Rest of the World, revenues rose to 115% amid 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.
Amid the acquisition of Midfield Concessions in the US, SSP has taken over locations at six of seven airports, 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”.
SSP said its expectation remains for revenue and EBITDA (underlying pre-IFRS 16) to be at the upper end of the range of around £2.9 billion to £3 billion and around £250 million to £280 million respectively for FY2023, and for a corresponding EPS (underlying pre-IFRS 16) in the range of 7.0-7.5p.
The group said it was also increasingly confident in the delivery of its planning assumptions for FY2024, namely revenues in the region of £3.2-3.4 billion, with a corresponding EBITDA (underlying pre-IFRS 16) in the region of £325-£375 million.
SSP Group CEO Patrick Coveney 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.”
SSP yesterday hosted an investor and analyst event in New York, providing detail on its strategy, including an overview of the North American business.
*SSP has been named a Platinum Partner for the Airport Food & Beverage (FAB) + Hospitality Conference & Awards, run by The Moodie Davit Report, to be held in Bangkok, Thailand on 12-13 September.
Early Bird registration is available through 1 July and preferential room rates at the event venue Millennium Hilton Bangkok can be accessed via https://airportfab.events/
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