SSP reports full-year sales and Ebitda anticipated to be at ‘upper end of expectations’: UK-based transport hub foodservice specialist SSP Group has reported full-year sales and Ebitda are now anticipated to be “at the upper end of expectations”. The company stated: “The second half of the financial year has started well with sales strengthening further to an average of 111% of 2019 levels in the first six weeks (circa 34% above 2022 levels). 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 with the same period in 2019. The strongest performing region is North America, where revenues are now at 124% of 2019 levels, reflecting the growth of domestic air travel and the scale of net gains in the region. In continental Europe, revenues are at 116%, driven by a strong performance across our air business and despite being held back by industrial action which mainly impacted our rail business. In the rest of the world, revenues rose to 112% as we saw further improvements in passenger numbers in Asia, most notably in India, Thailand and Australia, all led by domestic air travel. In the UK and Ireland, sales strengthened materially to 94% reflecting strong air sales over the Easter period. While we continue to face macroeconomic uncertainty, we believe that the travel food and beverage sector will remain structurally resilient to pressures on consumer spending and that our global footprint, with increasing exposure to the North American and Asia Pacific regions, will enable us to deliver sustained growth. Progress in the first half of the year has been encouraging as we have maintained revenue momentum and have actively mitigated inflationary pressures to deliver a strong conversion of sales to profitability. As we look ahead to the second half, driven by the pace of recovery of passenger numbers, we are now planning for revenue and Ebitda (underlying pre-IFRS 16) to be at the upper end of our previous expectation of £2.9bn-£3.0bn and £250-£280m respectively for the 2023 financial year. Performance in the year is expected to be particularly strong in our North America and rest of the world regions, where we typically operate with joint venture partners. The corresponding earnings per share (underlying pre-IFRS 16) for the 2023 financial year are expected to be in the range of 7.0p-7.5p. Our longer term plans include a benefit from our pipeline of secured net contract gains which is now expected to add circa £625m to annualised revenue by 2026 (compared with 2019), when fully mobilised. Based on our planned opening programme, the pipeline will contribute cumulative net contract gains of circa £200m in 2023, £350m-£400m in 2024 and £550-£600m in 2025 (compared with 2019). The additional revenues from our secured pipeline are planned to contribute incremental Ebitda, albeit the planned contribution initially will include, as normal, the impact of maturity and pre-opening costs. Furthermore, as a consequence of the strong trading trajectory, we have an increased level of confidence in the delivery of our planning assumptions for FY2024, namely revenues in the region of £3.2bn-3.4bn, with a corresponding Ebitda (underlying pre-IFRS 16) in the region of £325m-£375m.” It comes as the group reported revenue increased to £1,318.4m for the six months ending 31 March 2023 (2022: £803.2m), up 64.1% on last year and at 104% of 2019 levels, “underpinned by the continued recovery in passenger travel volumes”. Underlying Ebitda stood off £90.5m, on a pre-IFRS 16 basis (2022: £14.7m). Underlying operating profit was £34.4m, on a pre-IFRS 16 basis (2022: loss of £36.4m). Patrick Coveney, chief executive of SSP Group, said: “This has been a strong first half for SSP, and the ongoing revenue momentum across the business means that we are now expecting our performance for 2023 to be at the upper end of our previous assumptions. We are continuing to deliver against our strategic priorities. Firstly, we are increasing our focus on the higher growth markets of North America and Asia Pacific. North America is our strongest performing region with revenues in the first half at 127% of 2019 levels, and we were delighted to announce the acquisition of 40 units across seven airports in the USA from Midfield Concessions earlier this month. Secondly, the ongoing enhancement of our capabilities across our customer proposition, digital technology, people and sustainability is driving like-for-like revenue growth and helping us to win more new business. Thirdly, we are revitalising our efficiency programme to support profit conversion. As ever, I would like to thank our clients and brand partners and not least our outstanding teams around the world for their contribution to this performance. Their ability to provide compelling food propositions for both clients and customers across the world is what sets this business apart. This deeply ingrained skill set, along with the long-term structural growth trends in the travel markets that underpin our business model, means that we continue to look to the future with confidence.”