Profits take off at SSP thanks to air passenger growth
SSP Group has reported a profit before tax increase of 37.1% to £144.8m in its financial results for the year.
The travel caterer also revealed revenue of £2.4b, an increase of 19.5%, in its results for the year ended 30 September 2017, driven by like-for-like sales growth, new contract openings and operational improvements.
Like-for-like sales were up 3.1%, driven by growth in air passenger travel, and net contract gains were 6%, up from last year's 1.7%, while the company's Indian joint venture TFS added an "encouraging" 2.9% to revenue and £12.9m to operating profit.
In the group's UK business, operating profit increased by 23.6% to £82.1m, and revenue 5.1% to £787.7m, comprising like-for-like growth of 2.1% and net contract gains of 2.7%. The group said like-for-like growth was particularly strong in the air sector, driven by continued growth in UK airport passenger numbers and increased spend per passenger, while trading in the rail sector was "soft".
SSP said growth in the rail channel in the UK continues to be impacted by ongoing terrorist incidents, strike action and disruption due to station redevelopments, particularly in London, and it is therefore anticipating slightly lower like-for-like sales growth next year.
The group also noted it expected to see more modest improvements in labour ratios in 2018 with the further increases in labour costs, due to the rise in the National Living Wage.
Kate Swann, chief executive of SSP Group, said: "SSP has delivered another good performance in 2017. 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."
SSP operates more than 2,500 units in rail stations and airports in more than 30 countries around the world. It recently introduced a new James Martin's Kitchen premium range as part of its UK on board rail offer, opened its first Paul Hollywood Knead outlet at London Euston station, and secured a deal with Gordon Ramsay to open a new grab and go concept in the air sector.
SSP reports 14.6% revenue increase in Q3 trading report >>
SSP to invest £2.5m in Belfast International Airport outlets >>
SSP opens Leon and Cabin at London Paddington station >>
SSP opens two new James Martin Kitchens >>
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