20th May 2025 09:35
(Alliance News) - SSP Group PLC on Tuesday reported a pretax loss at the half-year stage, weighed by a number of one-off charges, although sales rose strongly.
The London-headquartered operator of food outlets at travel locations and owner of the Upper Crust brand swung to a pretax loss of GBP37.3 million for the half year ended March 31 from a pretax profit of GBP12.8 million a year prior.
This includes total charges of GBP52.5 million, among which were GBP24.5 million of impairments primarily relating to France and Italy.
The impairments were driven by a number of contracts continuing to perform below previous expectations, SSP explained.
In addition, SSP recognised total GBP27.0 million charges in relation to IT transformation costs as it develops a number of cloud-based IT systems.
On an underlying basis pretax profit increased 24% to GBP15.0 million from GBP12.1 million.
Earnings before interest, tax, depreciation and amortisation improved 7.5% to GBP114 million from GBP106 million.
Revenue increased 9.2% to GBP1.66 billion from GBP1.52 billion, or by 12% at constant currency, with like-for-like sales growth of 5%.
Sales growth was outstripped by a 13% increase in operating costs to GBP1.65 billion from GBP1.46 billion.
The interim dividend was increased by 17% to 1.4 pence from 1.2p a year ago.
Shares in SSP were up 2.2% at 170.94 pence each in London on Tuesday morning.
SSP said sales in North America rose 13%, in continental Europe by 3%, in the UK by 9% and in Asia-Pacific and Eastern Europe, Middle East & Africa by 38%.
The firm maintained full-year guidance, while noting a "greater level of macroeconomic uncertainty".
"We believe it is prudent to plan for a degree of ongoing uncertainty of demand through the second half," the firm said in a statement.
SSP forecast revenues of GBP3.7 to GBP3.8 billion for the financial year ending September, operating profit of GBP230 to GBP260 million, and earnings per share of 11.5 to 13.5 pence on a constant currency basis.
In the year to September 30, 2024, SSP reported revenue of GBP3.43 billion, operating profit of GBP206 million and EPS of 10.0p.
SSP said like-for-like sales during the first six weeks of the second half of the financial year to May 11 grew by 5% on a constant currency basis.
In the UK, LFL sales are up 10% in the second-half to date, including a modest impact in its Marks Spencer Group PLC units as a result of "their well-reported systems issues".
M&S has been hit by an ongoing cyber attack which has taken its online sales offline. M&S reports full-year results on Wednesday.
In addition, SSP said it expects to complete the initial public offering of Travel Food Services Ltd in India in the summer. It originally targeted the IPO for the spring, when it was first announced last December.
Late April, SSP received 'in principle' clearance to proceed with the IPO from SEBI, the Indian market regulator.
SSP acquired an initial stake in TFS in 2016 and currently holds 49% of TFS.
TFS is a joint venture between SSP and K Hospitality Corp.
By Jeremy Cutler, Alliance News reporter
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