North America, Asia Pacific drive growth at SSP Group

Travel location-based food and beverage outlet operator SSP Group released its financial results for the first half of its 2017 financial year to 31 March on Thursday, reporting underlying operating profit of £42.8m - an improvement of 24.7% at constant currency, and 38.5% at actual exchange rates.

The FTSE 250 firm’s revenue was £1.07bn, up 8.1% at constant currency and 19.6% at actual exchange rates, with like-for-like sales up 2.9%, which the board said was driven by air passenger travel and retail initiatives.

Net gains of 3.4% were put down to “strong” performances in the North America and the Rest of World divisions.

SSP’s underlying operating margin was up 30 basis points at constant currency to 3.7%, with the firm’s strategic initiatives said to be “delivering well”.

The TFS joint venture added 2.4% to revenue and £3.7m to operating profit, resulting in a combined group operating margin of 4.0%.

Underlying profit before tax was £34.7m, which was up 49.6%, with reported profit before tax coming in at £33.0m.

SSP said its underlying earnings per share were 4.2p, which was up 40%, with reported earnings per share of 3.8p.

The board declared an interim dividend of 3.2p per share, up 28.0%.

“SSP has delivered another good performance in the first half of 2017 and we continue to make progress on our strategic initiatives,” said SSP CEO Kate Swann.

“Constant currency operating profit was up 25% driven by good like-for-like sales growth and further operational improvements.

“We have had a particularly strong period of new contract openings, growing our presence across the world particularly in North America and the Asia Pacific region.”

Swann said the pipeline was “robust” and the board was pleased with the new contracts won in the first half.

“Our joint venture in India has started well and we are encouraged by the progress we are making there.

“Looking forward, the second half has started in line with our expectations and whilst a degree of uncertainty always exists around passenger numbers in the short term, we continue to be well placed to benefit from the structural growth opportunities in our markets and our programme of operational improvements.”