British airport and train station focused catering company SSP Group PLG (LON: SSPG) saw further progress in its financial performance during the Company’s third quarter, despite what continues to be an uncertain period for the air travel sector.
The Company said it made progress on its strategic initiatives during the third quarter, with revenues up 9.2% on a constant currency basis. This was comprised of a like-for-like sales growth of 2.0% and net gains of 7.2%. Based on actual exchange rates, Group revenues increased 10.3% year-on-year during the period.
For the first three quarters from 1 Octoebr 2018 to 30 June 2019, Group revenues increased 7.6%. This included; like-for-like sales growth of 2.0%, net contract gains of 5.2% and 0.4% due to the impact of Stockheim. On an actual exchange rate basis, Group revenue increased by 8.3% on-year.
SSP Group said their expectations remained unchanged for the full year.
SSP Group statement
With more in-depth insight, the Group’s statement read,
“In the UK, like-for-like sales growth was in line with our expectations, with stronger like-for-like sales growth in the air sector compared to rail. In Continental Europe, like-for-like sales continued to be held back by slower passenger growth in the Nordic countries and the impact of airport redevelopment activity in this region and in Spain. In North America, like-for-like sales growth was driven by increasing passenger numbers, although some of our airports have been impacted by the grounding of Boeing Max 737 aircraft and the transfer of passengers away from our terminals. In the Rest of the World, like for like sales growth has been mixed, with good performances in Egypt and the Middle East slightly offset, as anticipated, by the cessation of operations at Jet Airways in India and slower growth in China. Looking forward to the rest of the year, we anticipate like-for-like sales growth for the Group to be around 2%.”
“Net contract gains were good, driven by Continental Europe and North America, where the mobilisation of new contracts has been slightly ahead of schedule. Looking forward, we expect net gains in the full year to be slightly ahead of our expectations at around 5%, and as usual they will be accompanied by pre-opening costs.”
Investor notes
Following the update, the Company’s shares rallied 1.03% or 7p a share during Friday morning trading 19/07/19 13:00 BST. Shore Capital and Liberum Capital analysts reiterated their ‘Buy’ rating, while HSBC reiterated their ‘Hold’ rating and Morgan Stanley upgraded their stance from ‘Underweight’ to ‘Equal Weight’.
Elsewhere, there have been updates from other food and drink retailers; Dominos Pizza Poland (LON: DPP), Premier Foods Plc(LON: PFD), Hotel Chocolat Group Plc (LON: HOTC), Distil PLC (LON: DIS) and Coca-Cola (NYSE: KO).
