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 2017, covering the period from 1 October to 31 December 2016.
Group
SSP has had a good start to the new financial year and expectations for the full year remain unchanged.
Revenue increased by 4.3% on a constant currency basis, comprising like-for-like sales growth of 2.4% and net contract gains of 1.9%. We completed the initial investment to create a joint venture with Travel Food Services (“TFS”) in India in December 2016 and this added a further 1.1% to sales, bringing the total group revenue increase in the first quarter to 5.4%. Total group revenue growth at actual exchange rates was 18.7%. We expect to have acquired the initial 33% stake in TFS in full by the end of February 2017.
Like-for-like sales growth in the UK and Continental Europe has remained positive, driven by increased passenger numbers in the air sector. In North America the positive trends seen in 2016 have continued through the first quarter of 2017. In the Rest of the World, like-for-like sales growth is in line with our expectations. The pipeline of new contracts remains encouraging.
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, Swedish Kronaand Norwegian Krone) in the first quarter compared to the same period last yearwas approximately 13%. If the current spot rates were to continue throughout the remainder of FY 2017, we would expect a positive currency impact on full year revenue of approximately 7%. This is,however,a translationimpact only.
Outlook
The new financial year has started in line with our expectations and the pipeline of new contracts is encouraging, although it is always difficult to predict the precise timing of the openings of new units. 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 and our programme of operational improvements.
Annual General Meeting
The Group’s Annual General Meeting will be held at 11:00am on 13th March 2017, at the offices of Freshfields Bruckhaus Deringer LLP, at 65 Fleet Street, London EC4Y 1HT.
