- First quarter revenue up 14%
- On track to meet full year targets
- Indian IPO expected in the Spring
SSP Group (SSPG) was one of the best mid-cap performers, gaining over 4% after the operator of restaurants and bars in travel locations said positive trading momentum has continued into the remainder of its first quarter to 31 December.
The shares have struggled over the last year, underperforming the FTSE 250 index by around 26%.
ROBUST FIRST QUARTER
Group sales increased 14% against the prior year in constant currencies for the three months to the end of the year, with like-for-like sales up 6%, net contract gains of 5% and acquisitions contributing 5%.
The company highlighted ‘continued structural growth’ across the travel industry as a key driver of performance and reiterated full-year expectations of revenue of between £3.7 billion and £3.8 billion and an underlying profit in the range of £230 million to £260 million.
Chief executive Patrick Coveney commented: ‘Our tightened agenda with a focus on driving returns from recent investments and enhancing efficiency to drive profitability is progressing well.
‘Performance in the structurally growing and higher returning regions of North America and Asia Pacific & EEME, (Europe, Eurasia, and the Middle East) where we continue to invest, was particularly pleasing in the quarter. We are confident in our prospects for the balance of FY25 and beyond.’
The company confirmed plans to list its Indian joint venture TFS on the Indian Stock Exchange was proceeding and due to complete in the Spring, subject to market conditions.
ANALYST VIEW
Shore Capital’s Greg Johnson described the update as a ‘really sound’ and said like-for-like sales growth was tracking ‘nicely ahead’ of his 4% full year expectations.
On the Indian IPO (initial public offering), Johnson added: ‘Given the growth potential and premium multiples seen on other comparable listed foodservice stocks in India, the TFS IPO will help shed a light on the implicit value across the group, as it continues its pivot towards faster growing regions.’
