SSP Group, which runs food and drink outlets in airports and railway stations around the world, said it remains on track to meet full-year expectations after like-for-like sales rose 4% in its third quarter, though the conflict in the Middle East has knocked trading across the Gulf.
Group sales were up 4% year on year at constant currency in the three months to 30 June, with three of the group’s four regions holding on to their trading momentum. Over the nine months to date, like-for-like sales are up 5%.
For a group so heavily exposed to international flights that saw the complete closure of important routes as the Middle East conflict flared up, this should be seen as a great result.
The UK and Ireland were the standout, with sales up 8% and like-for-like growth of 11%, helped by strong seasonal trading, an improved customer proposition and the lapping of last year’s M&S cyber incident. North America grew 4%, supported by additional outlets across its existing airport estate, while Continental Europe was broadly flat as the group pressed on with its profitability plans and its European rail review.
The drag came from the APAC & EEME division, where like-for-like sales fell 2% and slowed sharply on the previous quarter as the Middle East conflict cut passenger numbers. Gulf markets traded at around 65% of prior-year levels, with knock-on effects on connecting traffic across the surrounding region.
SSP said conditions in the Gulf remain uncertain but that its focus is on what it can control through the key summer trading period, pointing to progress on its “Focus 26” operational plan.
Nonetheless, investors seemed impressed with the numbers and shares were 1% higher on Tuesday.
Assuming the operating environment holds and at current exchange rates, the group reiterated guidance for earnings per share of 13.6p to 14.8p and free cash flow of more than £100m, alongside further progress towards its medium-term target of a 20% return on capital.