An Upper Crust outlet
SSP delivered strong sales across all regions in Q3 and maintained its full year guidance / Image source: SSP
  • Positive momentum continued in Q3
  • Full year outlook reaffirmed
  • ‘Well-positioned’ for summer period

Shares in SSP (SSPG) topped the FTSE 250 leader board on Wednesday (10 Jul), surging 13% higher to 176.5p after the food travel expert served up news of strong third quarter sales and reiterated its full year earnings guidance.

The owner of brands including Upper Crust and Le Grand Comptoir also called out increasing demand for leisure travel and insisted it is ‘well-positioned’ for the peak summer period, while broker Shore Capital flagged a potential sales boost from the notable sporting events across Europe.


For the uninitiated, SSP operates restaurants, bars, cafes and other food and drink outlets at airports and railway stations across 37 countries under owned brands such as Upper Crust, Urban Crave and Ritazza and franchises it runs including Burger King, Starbucks (SBUX:NASDAQ) and M&S Simply Foods.

The company reported a good start to its second half with the positive momentum seen in the first half flowing through into the third quarter to 30 June 2024.

Group sales were up 16% year-on-year in Q3, a modest improvement on the growth seen in the first six weeks of the quarter, reflecting 6% like-for-like growth and contributions from new contracts and acquisitions.

Scanning the UK market for growth, quality and value

Led by CEO Patrick Coveney, SSP delivered strong sales across all regions, with total sales up 27% in North America, including 5% like-for-like growth and contributions from acquisitions in the US and Canada.

The standout regional performer was Asia Pacific and Eastern Europe & Middle East, where revenue surged 33% higher as travel across the regions continued to recover. And with support from fewer train strikes, sales skipped 12% higher in the UK & Ireland. Revenues were 7% to the good in Continental Europe to boot.


There was also relief as SSP left its expectations for the year to September 2024 unchanged.

Management’s ‘planning assumptions’ are for revenue within the £3.4 billion to £3.5 billion range, with underlying EBITDA (earnings before interest, tax, depreciation and amortisation) to be within the £345 million to £375 million range and underlying operating profit to be between £210 million to £235 million.

SSP’s update also referenced the ORR’s (Office of Rail and Road) decision not to refer the railway station catering market to the CMA (Competition & Markets Authority), which removes a potential risk to its revenues. The firm stated that it ‘welcomes the clarity of the ORR’s findings and will continue to work with the network operators in responding to its recommendations’.


‘With continued momentum, the Q3 outturn is supportive of full year estimates, with global travel trends (especially aviation) remaining positive, industrial action waning and a potential boost from notable sporting events across Europe,’ said Shore Capital analyst Greg Johnson.

‘Against the context of recent share price weakness, we would see today’s update as reassuring, with the current depressed valuation failing to capture the embedded growth built into forecasts and the longer-term potential in this structurally attractive market.’

AJ Bell investment director Russ Mould remarked that it has been a rough journey for the airport and railway station concessions operator since the pandemic but today’s update suggests it is making tangible progress.

‘Benefiting from a captive audience, SSP enjoys significant pricing power, but the disrupted recovery in travel and some missteps on the company’s part meant it has not taken full advantage of these inherent strengths,’ said Mould. ‘Investors will hope normal service is now resumed.’

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.


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Issue Date: 10 Jul 2024