LEGAL | Staff Reporter, UK

SSP Group posts 7.3% third quarter revenue growth

Sales were boosted by the increase in passenger numbers.

SSP Group plc, operator of food and beverage outlets in travel locations worldwide, issued its trading update for the third quarter of its financial year ending September 30 of this year, covering the period from April 1 to June 30.

The company’s total group revenue increased by 7.3% on a constant currency basis, comprising like-for-like sales growth of 2.7%, net contract gains of 3.3% and the impact of the Stockheim acquisition of 1.3%. At actual exchange rates, given the relative strengthening of sterling against most currencies compared with the same period last year, total group revenues for the period increased 5.8% year-on-year.

According to the SSP Group report, like-for-like sales growth in the UK and Continental Europe was broadly in line with that seen in the first half of the year, driven by on-going growth in the air sector. However, the additional impact of the strike action in France posed challenges to the company’s rail sector trading.

In North America, like-for-like sales rose, on the back of the mentioned growth in air passenger numbers. Trends seen in the first half have continued into the third quarter across the rest of the world, with good like-for-like sales growth, including in Hong Kong, Egypt and India.

“Looking forward to the rest of the year, our expectations remain unchanged and we anticipate like-for-like sales growth for the Group to remain in the region of 2% to 3%,” the company said in the statement.

The SSP Group said that trading in the new units has been encouraging, with the programme of new unit openings for the rest of the year, in particular in North America, moving slightly ahead of plans.

“As such we are now expecting the contribution from net gains for the Group in the second half to be around 3%, and around 4.5% - 5% for the full year,” the company said.

“We have seen a good improvement in the operating margin in the third quarter driven by the on-going roll out of our strategic initiatives, with operating margin growth a little ahead of that seen in the first half (excluding the acquisition impact of TFS).”

For the nine month period from October 1, 2017 to June 30 of this year, total group revenues increased by 10.2%, including LFL sales growth of 2.8%, net contract gains of 5.6% and revenues from acquisitions of 1.8%. At actual exchange rates, total Group revenue increased by 8.3% year on year.

“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 SSP Group said.

The Group's results for the year ending September 30, 2018 are expected to be released on November 21.

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