SSP Group plc, a leading operator of food and beverage outlets in travel locations worldwide, announces a trading update for the fourth quarter, ahead of its financial year ending 30 September 2017, covering the period from 1 July 2017 to 30 September 2017.
On a constant currency basis, total Group revenues for the period from 1 July 2017 to 30 September 2017 are expected to increase by approximately 14.8%, with like-for-like sales growth of approximately 3.0%, net contract gains of approximately 8.5% and additional revenue from Travel Food Services in India (“TFS”) of approximately 3.3%, 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 are expected to increase by approximately 17.5% year-on-year.
Like-for-like sales in the fourth quarter have been good and are expected to increase by approximately 3.0%. Like-for-like sales growth in the air sector was driven by increased passenger numbers. Trading in the rail sector has remained soft during the quarter.
Net contract gains in the fourth quarter are expected to be approximately 8.5%. This performance benefitted from a strong contribution from our recently opened operations at Chicago Midway Airport, where we have continued to operate additional units, on a temporary basis, for the full quarter. The redevelopment of Chicago Midway Airport is expected to commence in FY 2018. Furthermore we have also benefitted from the deferral of other planned unit closures which will now take place in FY 2018.
TFS has continued to perform well, with results now expected to be ahead of our expectations.
For the twelve month period from 1 October 2016 to 30 September 2017, total Group revenues are expected to increase by approximately 11.4% on a constant currency basis, including like-for-like sales growth of approximately 3.0%, net contract gains of approximately 5.8%, revenues from TFS of approximately 2.9% and a negative impact of -0.3% arising from the additional leap year day in 2016. At actual exchange rates, total Group revenues are expected to increase by approximately 19.3% year-on-year.
The trends seen in the operating margin in the first half of the year have broadly continued during the second half.
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. Our estimate of the overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Swedish Krona, and Norwegian Krone) during the full year 2017 compared to the 2016 average has increased from the third quarter trading update and is now expected to be a positive effect of around 8%.
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.
