SSP Group plc, a leading operator of food and beverage outlets in travel locations worldwide, announces its trading update for the third quarter of its financial year ending 30 September 2017, covering the period from 1 April 2017 to 30 June 2017.
On a constant currency basis, total Group revenues for the period from 1 April 2017 to 30 June 2017 increased by 14.6%, with like-for-like sales growth of 3.6%, net contract gains of 7.6% and an additional 3.4% of revenue from Travel Food Services in India (“TFS”), compared with the same period last year. At actual exchange rates, given the weakening of Sterling against most currencies compared with the same period in the prior year, total Group revenues for the period increased 21.7% year-on-year.
Like-for-like sales in the third quarter increased by 3.6%, which included a positive benefit arising from the timing of Easter. Like-for-like sales growth in the air sector was driven by increased passenger numbers. Trading in the rail sector has remained softer. More recently, we have seen some further impact from the geopolitical activity in the UK and Continental Europe.
Net contract gains in the third quarter were 7.6%. This performance benefited from the commencement of operations at Chicago Midway airport, ahead of plan. On a temporary basis we are running all the food and beverage operations in Midway until re-development commences. In addition to this, we have benefited from the deferral of some planned unit closures in the quarter. Looking forward, we expect net contract gains for the full year to be around 5.0% – 5.5%. The anticipated operating profit contribution from new unit openings will, as normal, include the impact of pre-opening costs.
TFS has continued to perform well in the quarter, with strong sales, a little ahead of our expectations.
For the nine month period from 1 October 2016 to 30 June 2017, total Group revenues increased by 10.4% on a constant currency basis, including like-for-like sales growth of 3.2%, net contract gains of 4.8%, revenues from TFS of 2.8% and a negative impact of -0.4% arising from the additional leap year day in 2016. At actual exchange rates, total Group revenues increased 20.4% year-on-year.
Outlook
Looking forward, whilst a degree of uncertainty always exists around passenger numbers in the short term, particularly in the current environment, we are well placed to continue to benefit from the structural growth opportunities in our markets and to create further shareholder value.
Currency
Trading results from outside the UK are converted into Sterling at the average exchange rates for the period. The overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Swedish Krona, and Norwegian Krone) during the first three quarters of 2017 compared to the 2016 average was 10.0%. If the current spot rates were to continue for the rest of 2017, we would expect a positive effect for the full year of around 7.0%.
2017 full year results announcement
The Group’s results for the year ending 30 September 2017 are expected to be released on 22 November 2017.
