SSP Group (LSE:SSPG) reported on Tuesday that third-quarter sales came in below expectations, citing underperformance in key regions such as the UK and Asia Pacific. Despite the slowdown, the company confirmed its guidance for the full year remains unchanged.
The travel-focused food and beverage operator recorded a 6% year-on-year increase in constant currency sales for Q3, slightly missing analyst forecasts of 7%. Like-for-like sales rose 3%, just under the 3.5% projected, while contract wins and acquisitions contributed an additional 5% to top-line growth.
Performance was weighed down by a 2% drag from the group’s exit from Germany’s motorway services and the deconsolidation of its Indian joint venture, AAHL. Like-for-like sales momentum weakened notably in the final seven weeks of the quarter, growing just 1% compared to 5% in the earlier part of Q3. However, trading improved again in early Q4, with like-for-like sales rising 3% over the first three weeks.
Regionally, results were mixed. The UK and Ireland, Asia Pacific, and the Eastern Europe/Middle East cluster underperformed. In the UK, issues at Marks & Spencer caused by a cyberattack disrupted performance, though sales have since rebounded. In Asia Pacific, increased geopolitical risk and air travel safety concerns weighed on demand toward the end of the quarter.
Continental Europe faced pressure from reduced consumer spending, which especially hit rail traffic, while North America saw slightly fewer passengers than the prior year but delivered a better-than-expected performance.
Despite these headwinds, management reaffirmed full-year constant currency guidance, attributing the steady outlook to cost-saving initiatives and improved early Q4 trading.
SSP continues to forecast full-year revenue between £3.7 billion and £3.8 billion, with pre-IFRS 16 operating profit expected to range between £230 million and £260 million. Pre-IFRS 16 earnings per share are projected at 11.5 to 13.5 pence.
At current exchange rates, currency effects are expected to reduce revenue by approximately 1.8% and cut operating profit by 4.4%.
SSP remains a key global player in travel-related food and beverage concessions. Analysts at RBC noted that while short-term challenges persist in the travel sector, the company’s strong expansion pipeline—particularly in the U.S.—is expected to support future growth. Margin recovery in Europe and rising free cash flow should follow as the firm completes its post-pandemic maintenance backlog and continues to open new units.
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