SSP starts new financial year with a splash

Travel food and beverage outlet operator SSP issued its trading update for its first quarter on Thursday, covering the three months to 31 December.

The FTSE 250 company said it had a good start to the new financial year, with expectations for the full year remaining 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%.

The firm completed the initial investment to create a joint venture with Travel Food Services in India in December, which 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%.

SSP said it expects to have acquired the initial 33% stake in TFS in full by the end of February.

“Like-for-like sales growth in the UK and Continental Europe has remained positive, driven by increased passenger numbers in the air sector,” the board reported.

“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.”

Trading results from outside the UK are converted into sterling at the average exchange rates for the year, the board said, with the overall impact on revenue of the movement of foreign currencies - principally the euro, dollar, Swedish krona and Norwegian krone - in the first quarter being approximately 13% year-on-year.

“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 translation impact only.”

SSP confirmed the new financial year started in line with expectations, and the pipeline of new contracts was encouraging, although it cautioned that it remained 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.