SSP Group Plc (LSE:SSPG) reported a 9.3% increase in first-half underlying operating profit but said conflict in the Middle East has slowed sales momentum at the start of the second half.
The travel food and beverage operator said like-for-like sales growth eased to 3% during the opening weeks of the second half, compared with 5% growth sustained across both quarters of the six months ended 31 March.
Underlying pre-IFRS 16 operating profit rose to £50 million from £45 million a year earlier on an actual currency basis. Revenue increased 6.2% at constant currency to £1.76 billion, supported by 5% like-for-like sales growth and 1.2% growth from net new space.
Chief Executive Patrick Coveney said, “This has been a period of resilience and progress for SSP,” adding that the group’s “geographically diversified business model and disciplined operational execution” had supported performance against “a challenging backdrop for the global travel sector.”
The company said like-for-like sales growth in Asia Pacific and EEME weakened sharply from 14% in March to 0% in the first weeks of the second half, with Gulf operations running at roughly 60% of normal trading volumes. The affected region accounts for around 2% of group sales.
SSP maintained full-year guidance, forecasting underlying earnings per share of between 13.6 pence and 14.8 pence after buybacks, based on current foreign exchange rates and assuming no significant deterioration in trading conditions through the remainder of the year.
Operating profit margin improved by 10 basis points to 2.8% on a pre-IFRS 16 basis.
Regionally, North America delivered underlying pre-IFRS 16 operating profit of £28.3 million, representing growth of 17.4% at actual exchange rates. Continental Europe reduced its operating loss to £8.7 million from £12.1 million a year earlier.
The UK division generated £22 million of operating profit, down 6% year-on-year due partly to insurance proceeds and compensation payments received in the prior period. Asia Pacific and EEME contributed £35.3 million, up 3.8% at actual exchange rates.
The company also confirmed it has completed around 60% of its £100 million share buyback programme, equivalent to approximately 4% of issued share capital as of 15 May.
An interim dividend of 1.6 pence per share was declared, compared with 1.4 pence a year earlier.
Free cash outflow before dividends and buybacks totalled £176 million, including a working capital outflow of £123.8 million and capital expenditure of £92.7 million, which was lower than the prior-year level of £130.1 million.
Net debt on a pre-IFRS 16 basis stood at £819.8 million, with leverage measured at 2.2 times EBITDA, above the company’s target range of 1.5 to 2.0 times.
SSP also announced plans to exit roughly one-third of its Continental European Rail estate, which currently comprises around 330 units. The company intends to focus on larger, higher-density locations, with the closures expected to begin mainly during the 2027 financial year.
More about SSP Group Plc
SSP Group Plc operates food and beverage outlets in travel locations including airports and railway stations across multiple international markets. The group partners with a range of global and local brands and serves customers through a geographically diversified network spanning North America, Europe, Asia Pacific and the Middle East.
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