SSP sees profits jump but flags Budget cost ‘headwinds’
The Upper Crust owner reported pre-tax profits up 35% to £118.6 million in the year to September 30.
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Your support makes all the difference.Upper Crust owner SSP Group has revealed annual profits jumped by more than a third and said it expects further growth across the UK despite soaring wage costs due to recent Budget measures.
The group, which runs food outlets at travel locations such as airports and train stations, reported pre-tax profits up 35% to £118.6 million in the year to September 30 as it was boosted by a buoyant global travel market.
Sales jumped 9% worldwide on a like-for-like basis despite a “disappointing” performance in continental Europe, with trading hit by factors including train strikes.
Operating profits in continental Europe plunged 49% to £18 million.
SSP has strong fundamentals and benefits from the global travel market’s sustained long-term growth trends
The group flagged UK “cost headwinds” in the second half of its new financial year ahead of the Government’s move to increase employers’ national insurance contributions (NICs) and the minimum wage, both taking effect from next April.
It did not disclose a figure for the cost hit, given that it is not expected to be material for the group, with the UK representing around a quarter of its global sales.
But it said it still expects “further growth and margin progression” in the UK despite the higher costs.
It said it had already seen solid sales growth in the new financial year so far, with group like-for-like sales up 5% over the first eight weeks.
Patrick Coveney, chief executive of SSP Group, said: “SSP has strong fundamentals and benefits from the global travel market’s sustained long-term growth trends.”
He added: “In continental Europe, we are accelerating our profit recovery plan, in particular by building returns from the significant number of recently renewed and extended contracts.
“Across the wider group, our priorities remain on sharpening our performance culture to drive profitable growth and returns, so as to unlock the full potential of SSP.”
The firm also said it had seen a boost in some markets from pop star Taylor Swift’s sell-out Eras tour, with sales in Stockholm, Sweden, as well as Sydney and Melbourne in Australia jumping by about 20% in the days around the concert.