SSP Group, the owner of Upper Crust and Millie's Cookies, has reported a rise in sales across the UK and Ireland, but warned of a significant decline in passenger numbers around Middle East travel hubs and a slowdown in the US.
The FTSE 100-listed company, which operates food and beverage outlets at transport hubs including railway stations and airports, described its recent financial performance as "resilient" in a "challenging environment".
Annual revenue and UK growth
Total revenues reached £3.8 billion for the year ending September, a 5% increase on the previous year. In the fourth quarter, covering July to September, UK and Ireland sales climbed 9% on a like-for-like basis compared with the same period last year.
This growth was fuelled by robust trading throughout the peak summer season and improvements to its outlets, including refurbished Marks & Spencer stores. SSP operates franchised outlets for brands including M&S, Starbucks, Burger King and The Breakfast Club.
Middle East conflict impact
However, the company cautioned that a considerable reduction in passenger volumes across the Gulf and key travel hubs since the onset of the Middle East conflict had weighed on trading, along with knock-on effects in the Eastern Mediterranean, Asia Pacific and Indian regions.
In the fourth quarter, revenues across the APAC and EEME region (Asia Pacific, Eastern Europe and Middle East) edged up by 1%, with passenger volumes recovering to 90% of prior-year levels. Passenger numbers in surrounding regions continued to fall short of normal levels for both local and connecting travellers, SSP noted.
US slowdown and profit forecast
The company also reported more muted footfall through North American terminals over the summer period, though sales still managed to grow by 2% year-on-year in the fourth quarter.
SSP warned investors that its operating profit for the full year is now anticipated to come in slightly below previous forecasts, at approximately £230 million. The company's shares fell by around 5% in early trading on Friday following the announcement.
Patrick Coveney, SSP's chief executive, said: "We have delivered a resilient Q4 trading performance in a challenging environment."
"Despite the significant impact of the Middle East conflict on passenger volumes in APAC & EEME, the strength and diversification of our portfolio leaves us well-positioned to deliver group earnings per share for the year in line with current market expectations."
