LEI:213800QGNIWTXFMENJ24
30 January 2024
Q1
Trading Update
"Strong start to the year
with encouraging trading momentum and progress
on strategic initiatives"
SSP Group
plc ("SSP" or "the Group"), a leading operator of restaurants,
bars, cafes and other food and beverage outlets in travel locations
across 36 countries, issues a Trading
Update for the first three months of its 2024 financial year,
covering the period from 1 October 2023 to 31 December
2023.
Group performance
The new financial year has started
well with Group sales in the first quarter of
£788m, up 21.2% on last year on a constant
currency basis. Like-for-like sales growth of 14.3% reflected
the further recovery of passenger numbers as well as the strength
of our customer proposition and operational execution. Net
contract gains of 6.9% were in line with expectations, as we
mobilise our extensive secured pipeline, and include a contribution
from acquisitions of 2.2%. Since the close of the first quarter, we
have continued to see good trading momentum, notwithstanding the
impact from industrial action which is expected to persist in both
Continental Europe and the UK throughout the second quarter.
Regional performance
We saw robust trading led by leisure
travel demand across all regions with the strongest performances
continuing to be in North America and APAC & EEME, where we
operate with joint venture partners. In North America, sales grew
by 30.5% year-on-year, on a constant currency basis, with a strong
like-for-like performance, up 10.2%, complemented by net gains of
20.3%, which included a c.10% benefit from the acquisition of the
Midfield Concessions business (with the final airport transferring
in November 2023). In Continental Europe, sales grew by 13.3%
year-on-year, on a constant currency basis, with a particularly
strong performance in Spain. In the UK, sales increased by 22.8%,
with a strong like-for-like performance, up 17.1%, reflecting good
passenger numbers in the air sector and further improvement in rail
passenger volumes as commuters continued to return to working in
offices, as well as a lower incidence of industrial action compared
with last year. In APAC and EEME, sales rose by 25.2% on a constant
currency basis, as we saw further improvements in passenger numbers
across the Asia Pacific region, most notably in India.
|
|
£m
|
|
vs Last
Year
(constant
FX rates)
|
|
vs Last
Year
(actual
FX rates)
|
Region
|
|
Total
|
|
LFL
|
Net Gains
|
Total
|
|
Total
|
N. America
|
|
186
|
|
10.2%
|
20.3%
|
30.5%
|
|
23.5%
|
C. Europe
|
|
282
|
|
11.5%
|
1.8%
|
13.3%
|
|
11.0%
|
UK & ROI
|
|
207
|
|
17.1%
|
5.7%
|
22.8%
|
|
22.7%
|
APAC & EEME
|
|
113
|
|
23.4%
|
1.8%
|
25.2%
|
|
17.3%
|
Group
|
|
788
|
|
14.3%
|
6.9%
|
21.2%
|
|
17.7%
|
New
business activity
Strong organic growth momentum has
been maintained into the new financial year. We have continued to make good progress extending and renewing contracts as well as winning new
business, including in North America, Thailand and India, to
augment our already strong pipeline. As announced in December
2023, we are also further expanding our presence in Saudi Arabia,
having signed a new contract with Jeddah Airport to operate three
food and beverage packages, representing a total of 26 outlets, for
an initial duration of between five and seven years.
In December 2023, we acquired ECG
Ventures Limited in Canada, which will complement our current
operations at Calgary and Edmonton Airports.
Outlook
While we face into macroeconomic and
political uncertainty, we believe that demand for travel will
remain resilient and the industry is well set for both short-term
and long-term structural growth. The new
financial year has started well, with revenue momentum being
maintained and inflationary pressures on
operating costs being mitigated through our ongoing productivity
and pricing initiatives.
As a result of our current trading
performance, our expectations for FY24 remain in line with the planning assumptions outlined at our
Preliminary Results on 5 December 2023. We continue to plan for like-for-like sales growth for the
full year of between 6% and 10%, net contract gains in the region
of 5% (with a further contribution of c.2% from acquisitions),
underlying EBITDA within the range of £345-£375m and underlying
operating profit within the range of £210-235m, all stated on a
pre-IFRS 16 basis, at constant currency based on average rates for
2023. The currency impact on these metrics, if current spot
rates were to continue through 2024, would be broadly unchanged since our Preliminary Results and would
represent a translation impact only.
Commenting on the performance, Patrick Coveney, CEO of SSP
Group, said:
"I
am pleased with the good start that SSP has made to the new
financial year. There continues to be encouraging momentum in our
key growth markets of North America and Asia Pacific and we have
also delivered double-digit like-for-like growth in our more
established markets of the UK & Ireland and Continental Europe.
Global demand for travel continues to grow and we have a strong
pipeline of secured new contracts around the world. This, combined
with our constantly improving customer proposition and our proven
ability to mitigate inflationary pressures, means that we remain
confident in our prospects for the balance of FY24 and
beyond."
Annual General Meeting
The Group's Annual General Meeting
will be held today at 10:00am at the offices of Travers Smith LLP,
at 10 Snow Hill, London, EC1A 2AL.
2024 Half Year results announcement
The Group's results for the half
year ending 31 March 2024 are expected to be released on 21 May
2024.
ENDS
CONTACTS
Investor and analyst
enquiries
Sarah John, Corporate Affairs
Director, SSP Group plc
Sarah Roff, Group Head of Investor
Relations, SSP Group plc
On 30 January 2024: +44 (0) 7736
089218 / +44 (0) 7980 636214
E-mail: sarah.john@ssp-intl.com
/ sarah.roff@ssp-intl.com
Media enquiries
Rob Greening / Nick Hayns
Powerscourt
+44 (0) 207 250 1446
E-mail:
ssp@powerscourt-group.com
NOTES TO EDITORS
About SSP
SSP is a leading operator of food
and beverage outlets in travel locations worldwide, with c.42,000
colleagues in over 600 locations across 36 countries. We
operate casual dining and quick service restaurants, cafes, lounges
and food-led convenience stores, principally in airports and train
stations, with a portfolio of around 550 international, national
and local brands. These include many of our own brands (such as
UrbanCrave, which brought the first "street eats" concept to
airports in the US, and Nippon Ramen, a noodle and dumpling concept
in the APAC region) as well as many franchise brands (such as
M&S, Starbucks and Burger King).
Our purpose is to be the best part
of the journey, and this is underpinned by our aim to bring leading
brands and innovative concepts to our clients and customers around
the world, with an emphasis on great value, taste, quality and
service - using digital technology to boost
efficiency.
www.foodtravelexperts.com