Travel caterer SSP Group guides to 18% earnings growth and unveils a £50m buyback, but shares dip as Middle East disruption weighs on Asia Pacific trading.
SSP Group (LSE: SSPG) shares fell on Friday even as the travel food and drink operator confirmed it remains on track to grow full-year earnings per share by around 18%, alongside a new £50m share buyback.
The drop came despite a solid quarterly update, with investors instead focusing on operating profit expected to land slightly below plan at about £230m, hit by softer North American passenger numbers over the summer and continued disruption from the Middle East conflict affecting its Asia Pacific and Middle East division.
Like-for-like sales rose 4% in the fourth quarter, taking full-year revenue up 5% to roughly £3.8bn, with the UK and Ireland the standout performer as like-for-like sales there jumped 9% on strong summer trading. Continental Europe also showed progress, with operating margin rising towards 3% from 2.2% as SSP continues turning around its French and German operations.
The Asia Pacific and Middle East region remains the weak spot, with passenger numbers still depressed by the conflict that began in February, though Gulf trading has recovered to around 90% of prior-year levels. Chief executive Patrick Coveney said the group's diversified portfolio left it well placed to deliver earnings in line with market expectations despite the disruption.
SSP's new £50m buyback is underpinned by improved cash generation and lower debt. Full-year results are due on 8 December, when investors will look for further detail on the Focus26 turnaround plan and whether the Gulf recovery and European margin gains can offset ongoing softness in North America and the wider Middle East region.
This report is based on SSP Group’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full markets calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Edwin Petrus on Unsplash.
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