LEI:213800QGNIWTXFMENJ24
3 October 2024
Q4 Trading Update
"GOOD TRADING MOMENTUM IN Q4"
SSP Group plc ("SSP" or "the Group"), a leading operator of restaurants, bars, cafes and other food and beverage outlets in travel locations across 37 countries, issues a Trading Update for the final quarter of the year ending 30 September 2024 ("Q4").
Good underlying trading momentum has continued through to the end of the financial year, leaving SSP well-positioned to deliver full year results within our previously published planning assumptions1.
Performance headlines2
· Strong Q4 revenue growth of c.15% YoY (on a constant currency basis), including LFL sales of 6%
· H2 revenue growth of c.15% YoY, with expected H2 operating profit growth of more than 30% and operating margin enhancement of c.100 bps, and strong performances in
· FY revenue of c.
· FY EPS expected to be c.10p (at actual FX rates), with operating profit within our planning assumption ranges, and including a benefit in interest and tax charges in the year
· Strong focus on cash, with year-end net debt expected to be in the range of c.
· Programme of actions in place to build profitability and margins in Continental Europe
· Focus on generating strong returns from the extensive capital investment programme of the last two years and on the integration of recent acquisitions
Commenting on the performance, Patrick Coveney, CEO of SSP Group, said:
"There has been good trading momentum across our business throughout Q4. Our
Q4 revenue performance
We have seen a strong sales performance through the peak summer period. Group sales in Q4 (1 July to 30 September 2024) were up 15% year-on-year, on a constant currency basis, with like-for-like sales growth of 6%, net contract gains of 5%, and a contribution from acquisitions of 4%.
Q4 |
|
vs Last Year (constant FX rates) |
|
vs Last Year (actual FX rates) |
|||
Region |
|
LFL |
Net Gains |
Acquisitions |
Total |
|
Total |
N.America |
|
4% |
9% |
7% |
20% |
|
16% |
C.Europe |
|
3% |
4% |
- |
7% |
|
5% |
|
|
9% |
3% |
- |
12% |
|
12% |
APAC & EEME |
|
9% |
2% |
19% |
30% |
|
24% |
Group |
|
6% |
5% |
4% |
15% |
|
12% |
In
In Continental Europe, sales growth of 7% was largely driven by the high level of new unit openings. Our LFL sales performance, at 3%, whilst strong in
In the
In APAC & EEME, sales grew by 30%, with strong like-for-like sales growth of 9%, driven mainly by
Second half 2024 expectations2
In the second half of the year, on a constant currency basis, revenue was c.
Full year 2024 expectations2
For the full year, on a constant currency basis, group revenue was c.
Full year EPS, at approximately 10p (at actual FX rates), is expected to be broadly in line with expectations, including a benefit from lower interest and tax charges in the year.
Full year regional performance expectations2
We expect to see strong operating profit growth across three of our regions:
We are 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 (contractually agreed as of September 2024). We have recently appointed Satya Menard3 as the new CEO of Continental Europe to lead this business.
Full year cash flow and leverage expectations2
Net debt is expected to be in a range of c.
Full year 2025 expectations2
Our performance in FY24 gives us confidence that we will see a year of good revenue and margin progression in FY25. 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.
We are planning for a lower level of capital expenditure in the year ahead as we conclude the backlog of renewals from the Covid period. Furthermore, having executed a number of important infill acquisitions recently, to accelerate our growth in strategically important markets, our focus is now on integrating these operations and delivering the planned returns. We anticipate little, if any, further new infill M&A activity in the near term.
Currency2
Reflecting a recent strengthening of sterling, compared to the average rates used for 2023, we now expect a currency impact on revenue, EBITDA and operating profit for FY24 of approximately (2.5)%, (4.3)% and (5.7)% respectively, up from the impacts of (2.0)%, (3.6)% and (4.6)% expected at the time of our Q3 Trading statement.
If the current spot rates (as at 30 September 2024) were to continue through 2025, we would expect a negative currency impact on revenue, EBITDA and operating profit of approximately (2.6)%, (3.8)% and (4.5)% compared to the average rates used for 2024.
Today's conference call
A conference call with Patrick Coveney, CEO, Jonathan Davies, Deputy CEO and Group CFO and Sarah John, Director of Corporate Affairs, will be held at 8.00am (UKT) today, and details of how to join can be accessed at https://webcasts.foodtravelexperts.com/results/tradingupdate2024/vip_connect.
2024 full year results announcement
The Group's results for the year ending 30 September 2024 are expected to be released on 3 December 2024.
Notes
1. Full year expectations vs planning assumptions2
|
|
|
|
Constant FX rates |
|
Actual FX rates |
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|
|
FY23 Actuals |
|
FY24 Planning Assumptions |
FY24 Expectation |
|
FY24 Planning Assumptions |
FY24 Expectation |
||
Revenue (£bn) |
|
3.0 |
|
c.3.4-3.5 |
c.3.5 |
|
c.3.3-3.4 |
c.3.4 |
||
EBITDA (£m) |
|
280 |
|
c.345-375 |
c.350-360 |
|
c.330-359 |
c.335-345 |
||
Operating profit (£m) |
|
164 |
|
c.210-235 |
c.210-220 |
|
c.198-222 |
c.200-210 |
||
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|
|
|
|
|
|
|
|
|
|
2. On an underlying, pre-IFRS 16 basis.
3. Satya Menard joined SSP in September 2024 as CEO of Continental Europe. Satya has more than 25 years of experience in the service industry, including extensive experience in the 'food and coffee' business across a number of European, South and North American countries. Previously, Satya worked as president of the out-of-home division of coffee company JDE Peet's and prior to this, he was global CEO of Sodexo's schools and universities division. He also held a number of leadership positions across various Sodexo divisions internationally.
ENDS
CONTACTS
Investor and analyst enquiries
Sarah John, Corporate Affairs Director, SSP Group plc
Sarah Roff, Group Head of Investor Relations, SSP Group plc
+44 (0) 7736 089218 / +44 (0) 7980 636214
E-mail: sarah.john@ssp-intl.com / sarah.roff@ssp-intl.com
Media enquiries
Rob Greening / Russ Lynch
Sodali & Co
+44 (0) 207 250 1446
E-mail: ssp@sodali.com
NOTES TO EDITORS
About SSP
SSP is a leading operator of food and beverage outlets in travel locations worldwide, with c.43,000 colleagues in over 600 locations across 37 countries. We operate sit-down and quick service restaurants, cafes, lounges and food-led convenience stores, principally in airports and train stations, with a portfolio of more than 550 international, national and local brands. These include our own brands (such as Urban Crave, which brought the first "street eats" concept to airports in the US and Nippon Ramen, a noodle and dumpling concept in the APAC region) as well as franchise brands (such as M&S Simply Foods, Starbucks and Burger King).
Our purpose is to be the best part of the journey, and this is underpinned by our aim to bring leading brands and innovative concepts to our clients and customers around the world, with an emphasis on great value, taste, quality and service - using digital technology to boost efficiency.
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