SSP profit jumps, CEO Kate Swann heads for the exit

SSP posted a rise in full-year profits on Wednesday thanks in part to new contracts, as it announced that Kate Swann will be stepping down from her role as chief executive officer after more than five years at the company.

In the year to 30 September, underlying pre-tax profit increased 24% to £184.4m on revenue of £2.6bn, up 9.5% on the previous year. Underlying operating profit was 22.7% higher at £195.2m and the final dividend came in at 5.4p per share, taking the full-year ordinary dividend to 10.2p, up 25.9%.

In addition, the group, which operates food and beverage outlets in travel locations, announced a special dividend of around £150m.

SSP highlighted an "encouraging" pipeline, with significant new contracts underpinning future growth, including at Montparnasse station in Paris, 29 Starbucks stores in the NS rail estate in the Netherlands, at Rio de Janeiro and Sao Paulo Guarulhos International Airports in Brazil, at Goa International Airport in India and in North America, at San Francisco and Seattle Airports.

The company said Swann will leave at the end of May 2019 and will be succeeded by Simon Smith, who is currently UK and Ireland CEO.

Swann said: "We have continued to expand our global footprint, materially extending our presence in North America, delivering excellent growth in India and entering the important Latin American region with two contracts in Brazil. The new business pipeline is encouraging and underpins our confidence in future growth. Our cash flow is robust and, in addition to investing £144m into the business this year, our highest to date, we are also returning circa £150m cash to shareholders.

"The new financial year 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."

Russ Mould, investment director at AJ Bell, said: "The signalled departure next year of chief executive Kate Swann has gone down terribly with SSP shareholders. She is credited for leading the business at a stellar rate, increasing pre-tax profit from £16.2m in 2013 when she joined to £182.9m this year.

"She is widely considered to be a best-in-class retail leader and her departure will be a real loss to SSP, hence why its shares have fallen a lot on the news.

"The big question now is whether she is up for one more big retail role. There are plenty of companies who need a helping hand yet she may be tempted to join a growing business rather than one which needs fixing, aligning with her true skills."

Shore Capital said it was disappointing to hear that Swann was leaving. "Although we expect a negative reaction from the market today (given the rating), we see many similarities with WH Smith, where the culture embedded should see the group continue to deliver further efficiencies against a backdrop of favourable structural growth opportunities in global travel."

At 0950 GMT, the shares were down 7% at 636.90p.