SSP says FY to be in line as airport traffic grows

SSP said it was forecasting like-for-like sales growth in the full year of 2% - 3%, adding that trading in the rail sector had remained soft during the year.

Net contract gains for the full year are expected to be around the top end of the previously announced range of 4.5% - 5%, boosted by strong growth in North America and on-going progress in the Rest of the World.

The acquisitions of TFS in India and Stockheim were “performing well” and expected to add approximately 1.5% to revenue in the full year, SSP added.

“Looking forward, whilst a degree of uncertainty always exists around passenger numbers in the short term, we are well placed to continue to benefit from the structural growth opportunities in our markets and to create further shareholder value,” the company said.

Analysts at Shore Capital said the believed that India represented "a significant opportunity" for SSP and that there was scope to enter other "potentially significant territories inorganically".

"There was no additional commentary on margins and so we are likely to retain our expectations for a 60bps improvement in the underlying full year operating margin to 7.3% (7.7% including TFS)," they said in a note to clients.

"Overall, the slightly stronger revenue performance leads us to increase our 2018F full year revenue, profit before tax (PBT) and earnings per share estimates by around £15m, £1.5m and £0.3m to £2.56bn, £180m and 24.6p respectively; this compares with our PBT expectations at the start of the year of £160m."

The broker recommended the shares a 'buy', highlighting "structural growth opportunities, continued robust momentum and scope for further returns to shareholders".

"We believe that there is scope for a further £100m+ special dividend, which combined with the ordinary dividend of c£40m, could equate to a near 5% yield. Such returns appear sustainable for the foreseeable future," Shore said.