SSP Group, a leading operator of food and beverage outlets in travel locations worldwide, announces its financial results for the year ended 30 September 2017.
Highlights:
- Underlying operating profit1 of £162.9m: up 27.0% at constant currency2, and 34.2% at actual exchange rates
- Revenue of £2,379.1m: up 11.7% at constant currency, and 19.5% at actual exchange rates
- Like-for-like sales3 up 3.1%: driven by growth in air passenger travel and retailing initiatives
- Significant net gains4 of 6.0%: strong performances in North America and the Rest of the World
- Underlying operating margin (excluding Indian joint venture, TFS) up 50 basis points at constant currency to 6.5%: as our strategic initiatives continue to deliver
- Indian joint venture, TFS, added 2.9% to revenue and £12.9m to operating profit: resulting in a combined group underlying operating margin of 6.8%
- Underlying profit before tax of £148.7m: up 38.3%. Reported profit before tax of £144.8m, up 37.1%
- Underlying earnings per share of 20.3 pence: up 31.0%. Reported earnings per share of 19.5 pence, up 28.9%
- Final dividend of 4.9 pence per share, bringing the full year dividend to 8.1 pence per share: up 50.0%, reflecting an increase in the payout ratio to 40%
- Underlying operating cash inflow5 of £103.5m, after our highest level of investment in the business to date
- Proposed c.£100m special dividend and share consolidation
- Encouraging pipeline of new contracts
Commenting on the results, Kate Swann, CEO of SSP Group, said:
“SSP has delivered another good performance in 2017. Operating profit was up 27.0% at constant currency, driven by good like-for-like sales growth, substantial new contract openings and further operational improvements. We have grown our presence across the world, particularly in North America and Asia and we are pleased with the performance of our new business in India. We have invested significant capital in the business this year, our highest to date, and at the same time we are returning cash to shareholders.
The new financial year has started in line with our expectations and, 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.”
1 Stated on an underlying basis which excludes the revaluation of the obligation to acquire an additional 16% ownership share of TFS by the end of calendar year 2018 and the amortisation of intangible assets arising on the acquisition of the SSP business in 2006. In the prior year the underlying basis only excluded the amortisation of intangible assets arising on the acquisition of the SSP business in 2006.
2 Constant currency is based on average 2016 exchange rates weighted over the financial year by 2016 results.
3 Like-for-like sales represent revenues generated in an equivalent period in each financial year in outlets which have been open for a minimum of 12 months. Like-for-like sales are presented on a constant currency basis.
4 Net contract gains / (losses) represent the net year-on-year revenue impact from new outlets opened and existing units closed in the past 12 months. Net contract gains / (losses) are presented on a constant currency basis.
5 Stated on an underlying basis after capital expenditure, net cash flows to/from associates and non-controlling interests, acquisitions and tax, and excluding underlying items.
