SSP (“SSP” or “the Group”), a leading operator of food and beverage outlets in travel locations worldwide, issues its Trading Update for the first quarter of its financial year ending 30 September 2019, covering the period from 1 October to 31 December 2018.
Group
SSP has had a good start to the new financial year. Total group revenue increased by 7.6% on a constant currency basis, comprising like-for-like sales growth of 2.5%, net contract gains of 3.8%, with the acquisition of Stockheim adding a further 1.3% to sales. Total group revenue growth at actual exchange rates was 7.7%.
The trends in like-for-like sales growth in the first quarter of the year were similar to those seen last year in the UK, North America and the Rest of the World. Like-for-like sales growth in Continental Europe was impacted by the recent protests in France towards the end of the quarter and by redevelopment activity at some of our sites. Looking forward to the full year, our expectation for like-for-like sales growth for the Group remains unchanged, at between 2% and 3%.
Net contract gains at 3.8% were slightly ahead of our expectations and were driven by significant contributions from North America and the Rest of the World. Looking forward to the rest of FY 2019, our latest expectation is for net gains to be a little ahead of our previous guidance of c.3%, largely a reflection of new contract wins in the first quarter, particularly in North America.
Currency
Trading results from outside the UK are converted into sterling at the average exchange rates for the year. The overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Indian Rupee, Swedish Krona and Norwegian Krone) in the first quarter compared to the same period last year was approximately 0.1%. If the current spot rates were to continue throughout the remainder of FY 2019, we would continue to expect a positive currency impact on full year revenue of around 1% compared to the average rates used for 2018. This is a translational impact only.
Outlook
The new financial year has started well and the pipeline of new contracts is encouraging. Whilst a degree of uncertainty always exists around passenger numbers in the short term, we continue to be well placed to benefit from the structural growth opportunities in our markets.
Annual General Meeting
The Group’s Annual General Meeting will be held at 11:00am on 21 February 2019, at the offices of Travers Smith LLP, at 10 Snow Hill, London EC1A 2AL.
