SSP Group plc (LON:SSPG), a leading operator of food and beverage outlets in travel locations worldwide, today issued its Trading Update for the third quarter of its financial year ending 30 September 2019, covering the period from 1 April to 30 June 2019.
Group
SSP had a good third quarter and made further progress on its strategic initiatives. Total Group revenue increased by 9.2% on a constant currency basis, comprising like-for-like sales growth of 2.0% and net contract gains of 7.2%. At actual exchange rates, total Group revenues for the period increased 10.3% year-on-year.
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.
For the nine month period from 1 October 2018 to 30 June 2019, total Group revenues increased by 7.6%, including LFL sales growth of 2.0%, net contract gains of 5.2% and the acquisition impact of Stockheim of 0.4%. At actual exchange rates, total Group revenue increased by 8.3% year on year.
Outlook
Looking forward to the full year, our expectations remain unchanged and whilst a degree of uncertainty always exists around passenger numbers in the short term, we continue to benefit from the structural growth opportunities in our markets and to create further shareholder value.
Currency
Trading results from outside the UK are converted into Sterling at the average exchange rates for the period. The overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Swedish Krona, and Norwegian Krone) during the first three quarters of 2019 compared to the 2018 average was +0.7%. If the current spot rates were to continue for the rest of 2019, we would expect a slightly positive effect for the full year of around +0.5%.
2019 Full Year Results Announcement
The Group’s results for the year ending 30 September 2019 are expected to be released on 20 November 2019.
