TIDMSSPG
RNS Number : 4718D
SSP Group PLC
21 June 2023
LEI: 213800QGNIWTXFMENJ24
21 June 2023
SSP GROUP PLC
TRADING UPDATE & INVESTOR EVENT SHOWCASING THE STRATEGY TO
DRIVE
GROWTH AND RETURNS IN NORTH AMERICA
SSP Group plc ("SSP" or "the Company"), a leading operator of
food and beverage outlets in travel locations worldwide, will host
an investor and analyst event in New York from 8am EDT (1pm BST)
today, providing further detail on our strategy, including an
in-depth overview of our North American business. SSP also provides
a Trading Update for the first ten weeks of the second half of the
financial year, covering the period from 1 April to 11 June
2023.
Trading Update
For the first ten weeks of the second half of FY2023, revenue
was 110% of 2019 levels. Improving underlying trading momentum
following the first six weeks trading as presented at our Interim
Results was offset by the impact of foreign exchange rates,
particularly in relation to the Euro, and the impact of industrial
action affecting UK Rail. This revenue performance includes the
benefit from net contract gains, as we accelerate the mobilisation
of our significant pipeline, in addition to price increases
compared to the same period in 2019.
The strongest performing region remains North America, where
revenues were at 123% of 2019 levels, reflecting the growth of
domestic air travel and the scale of net gains in the region. As we
approach the peak summer trading period, in Continental Europe
revenues were at 114%, driven by a strong performance across our
Air business and despite being held back by currency movements and
industrial action. In the Rest of the World, revenues rose to 115%
as we saw further improvements in passenger numbers in Asia led by
domestic Air travel. In the UK and Ireland, sales strengthened to
94%, reflecting strong Air sales, despite the impact of ongoing
industrial action on the UK Rail sector.
Our strong momentum in extending and renewing contracts as well
as winning new business has been maintained in the second half to
date.
Midfield Concessions Update
The acquisition of the units at six of the seven Midfield
Concessions airports is now complete, which is slightly earlier
than originally anticipated. In the FY2023 financial year, the
Midfield Concessions business will now deliver a modest level of
sales benefit with the underlying operating profit benefit broadly
offset by acquisition and integration costs.
Investor Event
At today's event there will be presentations from the Group and
North American executive teams, followed by a tour of Terminal 4 at
John F. Kennedy International Airport.
Patrick Coveney, Group CEO, and Jonathan Davies, Deputy CEO and
CFO, will describe how SSP's economic model will deliver long-term
sustainable value for shareholders through accelerated revenue
growth, profit conversion, cash generation and capital allocation.
Our North American team, led by regional CEO Michael Svagdis, will
detail the positive industry outlook for the region and outline why
we believe SSP America is well-placed to accelerate our growth in
this market. The event will also set out how SSP's business model
and capabilities, including digital, automation and menu
engineering, are driving stronger sales and profit performance.
We will outline a medium-term financial framework for
sustainable growth, highlighting:
-- Stronger sales growth resulting from our pivot to
structurally higher growth markets (principally N. America and Asia
Pacific) and an increasing level of investment in net new contract
wins in these regions
-- Sustainable operating margin enhancement benefitting from
operating leverage (driven by revenue growth) in addition to our
re-vitalised efficiency programme and pricing initiatives
mitigating inflationary cost pressures
-- Sustainable medium-term earnings growth driven by strong
operating profit growth, with minorities continuing to grow in line
with revenue growth in countries with JV partnerships
-- Capital investment funded from operating cashflow,
underpinned by high returns on capital projects, with 3-4 year
discounted cashflow paybacks, in line with historical
performance
-- Balance sheet deleveraging, the pace of which will be
determined by the scale of new business investment
-- Anticipation of the re-instatement of the ordinary dividend
with a target payout ratio of c.30-40% and surplus cash returned to
shareholders in line with our capital allocation framework
Copies of the materials from today's event will be available on
our website at www.foodtravelexperts.com/investors.
Outlook
With the earlier than anticipated completion of the acquisition
of the Midfield Concessions business and the continuation of strong
trading momentum, our expectation remains for revenue and EBITDA
(underlying pre-IFRS 16) to be at the upper end of the range of
c.GBP2.9bn- GBP3.0bn and c.GBP250m- GBP280m respectively for
FY2023, and for a corresponding EPS (underlying pre-IFRS 16) in the
range of 7.0-7.5p. We are also increasingly confident in the
delivery of our planning assumptions for FY2024, namely revenues in
the region of GBP3.2-3.4bn, with a corresponding EBITDA (underlying
pre-IFRS 16) in the region of GBP325-GBP375m.
Commenting on the update, Patrick Coveney, CEO of SSP Group,
said:
"We are pleased to report that the strong momentum across our
business has continued into the second half of the year. The
strongest regional revenue performance continues to be in North
America, reflecting both the growth in domestic air travel as well
as the scale of our net gains in the region.
Our acquisition of the Midfield Concessions business in the USA,
which includes 40 units across seven airports, has now largely
completed, adding to our excitement about the prospects for our
North American business. We look forward to sharing that excitement
with investors and analysts at today's event in New York and, more
broadly, to providing further detail on our plans to deliver
long-term sustainable growth for all of our stakeholders."
Reporting dates
SSP expects to provide an FY2023 pre-close Trading Update at the
end of September.
CONTACTS
Investor and analyst enquiries
Sarah John, Corporate Affairs Director, SSP Group plc
Sarah Roff, Group Head of Investor Relations, SSP Group plc
On 21 June 2023: +44 (0) 7736 089218
Thereafter: +44 (0) 203 714 5251
E-mail: sarah.john@ssp-intl.com / sarah.roff@ssp-intl.com
Media enquiries
Rob Greening / Nick Hayns
Powerscourt
+44 (0) 207 250 1446
E-mail: ssp@powerscourt-group.com
NOTES TO EDITORS
About SSP
SSP is a leading operator of food and beverage outlets in travel
locations worldwide, with c.37,000 colleagues in over 600 locations
across 36 countries. We operate sit-down and quick service
restaurants, cafes, lounges and food-led convenience stores,
principally in airports and train stations, with a portfolio of
more than 550 international, national and local brands. These
include our own brands (such as UrbanCrave, which brought the first
"street eats" concept to airports in the US, Nippon Ramen, a noodle
and dumpling concept in the Asia Pac region, and Juniper, a premium
bar in the UK) as well as franchise brands (such as M&S,
Starbucks and Burger King).
Our purpose is to be the best part of the journey, and this is
underpinned by our aim to bring leading brands and innovative
concepts to our clients and customers around the world, with an
emphasis on great value, taste, quality and service - using digital
technology to boost efficiency.
www.foodtravelexperts.com
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