SSP Group plc (LSE:SSPG) has reported full-year revenue of approximately £3.8 billion, representing a 5% increase year-on-year, and announced a new share buyback programme of up to £50 million as the travel food and beverage operator expects higher earnings and improved cash flow.
The company reported like-for-like sales growth of 4% for the financial year, with fourth-quarter like-for-like revenue also increasing by 4%.
Trading was affected by lower passenger volumes in parts of Asia Pacific (APAC) and Eastern Europe and the Middle East (EEME), which the company attributed partly to disruption associated with the Middle East conflict.
SSP also reported subdued passenger volumes in North America, which affected operating profit during the period.
Group operating profit is expected to reach approximately £230 million, while earnings per share are forecast to increase by around 18% to approximately 14.0 pence.
According to the company, the anticipated increase in earnings per share reflects lower minority interest and tax charges.
SSP also provided an update on its Focus26 operational improvement programme, which includes measures intended to improve profitability and operating efficiency across its regional businesses.
In Continental Europe, the group expects its operating profit margin to increase from 2.2% to approximately 3%, reflecting progress under the programme.
The UK and Ireland business also reported higher trading activity during the summer period, contributing to the group’s overall performance.
SSP expects underlying free cash flow after interest to reach approximately £70 million for the full year. This would represent a year-on-year improvement of between £140 million and £150 million.
The company also expects an improvement in group return on capital employed (ROCE), alongside a reduction in leverage towards the lower end of its target range of 1.5 to 2.0 times.
Following the improvement in its expected cash flow and leverage position, SSP announced the launch of a share buyback programme of up to £50 million.
The company said the programme is consistent with its capital allocation priorities, which include managing leverage and returning capital to shareholders.
The buyback announcement follows a financial year in which SSP increased revenue despite variations in passenger traffic across its regional markets.
The group continues to operate food and beverage outlets in airports, railway stations and other travel locations, with its financial performance influenced by passenger volumes, regional trading conditions and operating costs.
SSP’s full-year figures remain subject to final reporting, with the company currently expecting revenue of approximately £3.8 billion, operating profit of around £230 million and earnings per share of approximately 14.0 pence.
About SSP Group
SSP Group plc (LSE:SSPG) is an international operator of food and beverage outlets in travel locations, including airports, railway stations and other transport hubs.
The company operates approximately 3,000 outlets across 38 countries, employing around 49,000 people. Its portfolio includes restaurants, cafés, bars, lounges and food-led convenience stores operating under international, national and local brands.
SSP’s activities are focused on providing food and beverage services to travellers through a combination of company-operated and branded retail concepts.
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