3rd Oct 2024 09:50
(Alliance News) - SSP Group PLC on Thursday backed full-year guidance, but flagged a forex hit from the strong pound and sluggish trading in Europe.
The London-based operator of restaurants, bars, cafes in travel locations said good underlying trading momentum has continued through to the end of the financial year, leaving it well-positioned to deliver full-year results within previously published assumptions.
In the fourth quarter, revenue rose around 15% on-year, at constant currency, including like-for-like sales growth of 6%.
Full-year revenue is expected of GBP3.5 billion, up 17% on-year, with operating profit expected to between GBP210 million and GBP220 million, up 30%, with operating margin of around 6%, up 50 basis points, all on a constant currency basis.
SSP expects to deliver earnings before interest, tax, depreciation and amortisation in the range of around GBP350 to GBP360 million.
Full-year earnings per share are expected to be around 10 pence, at actual forex rates.
SPP expects to see strong operating profit growth across three of its regions: North America, Asia Pacific & APAC and Eastern Europe & the Middle East and the UK.
However, in Continental Europe, operating profit in the year is expected to be lower than last year.
This in part reflects the impact of the scale and timing of contract renewals and new contract mobilisation, industrial action and weak trading in the motorway services business. More recently, European profit has been impacted by lower than anticipated demand during the Olympics in Paris, SSP noted.
The firm said it was "taking action" to improve the future profitability of the region, focusing on driving returns from the investment programme, simplifying the leadership structure, reducing the cost base, and exiting the German motorway services business.
SSP said its performance in financial 2024 gives it confidence for a year of "good revenue and margin progression" in financial 2025.
"Our expectations are underpinned by the continued structural growth in travel, optimising the performance and returns from our extensive recent investment programme and the secured new contract pipeline, together with planned operating efficiencies. Further progress will be supported by the set of current and planned actions that we are taking to drive returns in Continental Europe," SSP said.
However, SSP did flag a worse than previously guided currency hit, due to the strength of the pound.
The firm now expects a currency impact on revenue, Ebitda and operating profit for financial 2024 of around 2.5%, 4.3% and 5.7% respectively, compared with impacts of 2.0%, 3.6% and 4.6% before.
Year-end net debt is expected to be in the range of around GBP610 to GBP630 million.
Shares in SSP were down 0.6% to 156.20 pence in London on Thursday.
By Jeremy Cutler, Alliance News reporter
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