SSP Group plc, key operator of food and beverage outlets in travel locations worldwide, has issued a trading update for the first four months of its 2023 financial year, covering the period from 1 October 2022 to 31 January 2023.
The new financial year has started well with group sales of £871m representing a strengthening of performance to 103% of 2019 levels and with revenues tracking above 2019 levels in North America, Continental Europe and the Rest of the World.
The encouraging revenue performance has been driven by a further recovery in passenger numbers, led by strong leisure travel demand over the extended holiday season. This momentum continued through the autumn and into the winter, demonstrating a resilience to the broader pressures on consumer spending. Business and commuter travel also continued to recover, albeit at a slower pace.
In the UK, the overall sales performance reflected both the seasonally higher weighting of rail contracts within the business and the impact of an increased frequency of industrial action across the rail network during December and January. However, the UK Air business maintained its strong momentum.
Outlook
Whilst the sector continues to face macroeconomic uncertainty, SSP believes that the travel food and beverage sector will remain structurally resilient to pressures on consumer spending and that its global footprint will deliver sustained growth.
Despite the impact of industrial action in the UK rail network, strong trading across our other regions means our performance remains on track against the planning assumptions outlined for 2023 at the Preliminary Results on 6 December 2022, namely for revenues to be in the region of £2.9-3bn with corresponding EBITDA in the region of £250-£280m.
As previously reported, these planning assumptions included a contribution from our pipeline of new outlets which, once fully mobilised, will add approximately £550m to revenues by 2025, compared to 2019.
CEO Patrick Coveney shared, 'The strong momentum in performance that we saw across the business in the second half of last year has continued into the new financial year, demonstrating the high quality of our business model.
'We are making excellent progress against our strategic ambitions and are on track to deliver against the planning assumptions we set at the beginning of the financial year.
'We have headroom for further growth and returns in multiple markets across the world. In particular, we see significant momentum and potential to accelerate expansion across the North America and Rest of World markets where revenues are now growing rapidly and which together are expected to account for approximately 40% of the Group by 2025. In addition to this we continue to expand in a targeted way in the UK, Europe and the Middle East.
'The long-term structural growth in the air and rail travel sectors and the ongoing demand from clients and customers around the world for our brands and food concepts leave us well-placed to create significant value for shareholders for many years ahead. I would like to thank our colleagues, clients and brand partners across the world for the enormous contribution that they make to SSP each and every day.”