SSP slides on guidance for low-end earnings per share

21st Sep 2023 07:26

(Sharecast News) - Shares in SSP Group were in the red on Thursday morning, after it flagged earnings per share guidance at the lower end of expectations.

The FTSE 250 travel caterer said earnings for the year would be nearer 7p per share, having previously issued guidance of up to 7.5p.

It said that over the last 16 weeks, its revenue was projected to be around 116% of 2019 levels, adjusted for currency fluctuations - an upswing from the 112% reported during the 10 weeks to 11 June.

The increased revenue was put down to a surge in air travel passengers and improved offerings, including digital features.

Revenue benefits from price hikes and additional contracts also contributed.

Compared to last year, SSP's revenues for the second half were anticipated to soar by 22%, culminating in expected annual revenue of £3bn, making for 37% year-on-year growth.

Despite sterling gaining strength against several major currencies in the latter half of the year, SSP still expected EBITDA to come in around £280m.

In the medium term, although global economic uncertainties and inflation pose challenges, SSP maintained a bullish outlook on the travel sector, asserting it was equipped for both short-term and long-term growth.

The company's performance in 2023 fortified its projections for 2024, anticipating an EBITDA between £325m to £375m.

Given the company's burgeoning momentum and slated launches, capital expenditures for the 2024 financial year were meanwhile expected to lie between £250m to £300m.

"We are enjoying a good finish to the year, and there is real momentum across the business as we enter 2024," said chief executive officer Patrick Coveney.

"Our focus on higher growth markets such as North America and Asia Pacific, as well as our ongoing efforts to enhance our capabilities and increase efficiencies, is delivering strong results.

"Looking ahead, we continue to see significant opportunities for SSP to drive growth and returns."

At 0950 BST, shares in SSP Group were down 8.16% at 224.65p.

Reporting by Josh White for Sharecast.com.