Strong demand helps boost revenues at SSP

21st Jun 2023 13:52

(Sharecast News) - SSP Group said full-year earnings were likely to come in at the top end of forecasts on Wednesday, after "strong" trading momentum continued into the second half.

The FTSE 250 firm, which operates food and drink outlets in airports and train stations worldwide, said revenue was ahead 110% in the first ten weeks of the second half when compared to the same period in 2019.

It did not provide a comparison to the previous year, although it noted that the improving trading momentum seen in the first six weeks of the second half had been offset by currency effects and the impact of the train strikes in the UK.

However, it added that it had seen a number of contract renewals and new business wins, while North America, its best performing region, had benefited from a surge in domestic travel.

Along with the imminent completion of its acquisition of Midfield Concessions in the US, it means the company now expects both revenues and earnings before interest, tax, depreciation and amortisation to be at the upper end of forecasts.

Full-year revenues are forecast to come in between £2.9bn and £3bn, while EBITDA is forecast to be between £250m and £280m.

Chief executive Patrick Coveney, speaking ahead of an investor day in New York, said: "We are pleased to report that the strong momentum across our business has continued into the second half of the year.

"Our acquisition of Midfield Concessions, which includes 40 units across seven airports, has now largely completed, adding to our excitement about the prospects for our North American business."

SSP - which owns Upper Crust, Ritazza and Millie's, among others - announced in early May that it was buying the concessions business of Midfield Concession Enterprise. At the time, it said it expected the business to contribute an additional $100m to North American revenues on an annualised basis.

Shore Capital said: "SSP's multi-decade structural growth opportunity remains on track, the business mix continues to evolve towards the faster growing air channel and regions, with the competitive backdrop favourable."

SSP is a house stock at Shore Capital.