SSP sales speed higher in third quarter

Sales accelerated at SSP Group, which operates food and drink outlets in airports, train and motorway service stations for the likes of Burger King, Starbucks and Upper Crust, in the third quarter, which was slightly ahead of management expectations.

Revenues swelled 21.7% in the three months to 30 June or by 14.6% if the effect of the weaker pound is ignored, which was an improvement from the respective growth rates of 19.6% and 8.1% in the first half of the year.

Like-for-like sales grew 3.6% in the quarter at constant currency rates, with net contract gains of 7.6% and additional 3.4% of revenue from Travel Food Services in India.

LFL sales were buoyed by the later Easter this year compared to last, while increased air passenger numbers were another boost that helped offset softer trading in the rail sector and some further impact from the geopolitical activity in the UK and Continental Europe later in the period.

New contract gains benefited from the early start of operations at Chicago Midway airport, where SSP is running all the food and beverage outlets until re-development begins.

Furthermore some planned unit closures elsewhere were deferred, though for the full year net contract gains are still expected to be around 5.0-5.5%.

Year to date, total revenues are up 20.4% or 10.4% on a constant currency basis, including LFL sales growth of 3.2%, net contract gains of 4.8%.

"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," the FTSE 250 company said.