SSP sees FY slightly ahead of expectations after strong Q4

Travel food outlet operator SSP Group said current earnings would be slightly ahead of expectations after a strong fourth quarter, adding that it still expected a return to pre-Covid levels of like-for-like revenue and core profits by 2024.

The company said that it expects revenues over the three months to September 30 to be 91% of pre-pandemic levels in 2019.

“As we look ahead to the 2023 financial year, whilst there remains considerable uncertainty in the macroeconomic environment, we are confident that our flexible and resilient business model will enable us to continue to offset cost inflation, manage supply chain and labour volatility, and optimise profitability and returns,” the company said on Tuesday.

SSP, which operates the Upper Crust chain, among others, at rail stations and airports, said that it now expected current-year sales of around £2.17bn and earnings before interest, tax, depreciation and amortisation (EBITDA) of £140m, slightly ahead of previous full year guidance.

Numbers of travellers have largely recovered after transport networks were deserted during the height of the Covid pandemic, followed by a work-from-home boom that saw a decline in daily commuters.

A slow return to office working and disruption to rail networks caused by industrial strike action has also impacted the travel sector.

SSP said sales activity in the UK, where it makes about a quarter of its total revenues, strengthened despite the challenges. However, passenger numbers were still low in China and Hong Kong which has seen ongoing national lockdowns enforced since the pandemic first struck.

Chief executive Patrick Coveney, who joined in March from convenience food producer Greencore, said passenger numbers were rebounding across the global travel sector.

“The strength of our second-half EBITDA performance reflects the benefit of operating leverage, as sales recover, as well as our ongoing management of inflationary cost pressures through productivity and pricing initiatives,” he said on Tuesday.

Reporting by Frank Prenesti at Sharecast.com