Upper Crust owner SSP sees earnings disappoint but forecasts summer boost

Upper Crust owner SSP Group has said it is set for a “summer of strong demand” as it expects the Paris Olympics and Euro 2024 football championships to boost travel across Europe.

SSP – which runs food outlets at transport sites including airports and railway stations – saw revenues jump by nearly a fifth, up 19% on a constant currency basis at £1.52 billion in the six months to March 31.

It said revenues were up 14% in the first six weeks of the second half, including a 9% rise in the UK.

But shares dropped 7% in morning trading on Tuesday as underlying earnings came in lower than expected, despite a 24% constant currency rise to £106 million.

Its statutory pre-tax profits also fell by 19% to £13 million as it was hit by finance costs.

Patrick Coveney, chief executive of SSP Group, said: “Trading momentum has continued into the second half, and we are confident in delivering on our expectations for the full year.

“In particular, we are well set to capitalise on what we anticipate will be a summer of strong demand in all our markets – including continental Europe, where the Olympics and the European Championships will help boost footfall in airports and stations.”

The group stuck by its guidance for the full year, pencilling in like-for-like sales growth of between 6% and 10% and for earnings before interest, taxes, depreciation, and amortisation of between £345 million and £375 million.

It said that as well as the Olympics and Euros, recent acquisitions are also expected to buoy its full-year figures, contributing around 3% of sales growth.

SSP struck a deal in February to buy airport bar and restaurant firm Airport Retail Enterprises (ARE) in Australia to further expand its footprint in the country.

It sees SSP add ARE’s 1,500 staff and 62 sites across seven airports, including access to four new airports in Australia where it does not already have a presence.

SSP, which employs 43,000 people, saw half-year UK like-for-like revenues rise 14.7%.

Growth in the second quarter slowed to 12.1% because of train strikes, but the group said overall industrial action was less than a year ago, which helped boost sales.

Trading in the UK was also given a fillip as workers returned to offices and by the recovery in overseas travel.