SSP shares rise 11% as Upper Crust owner benefits from leisure travel boom

SSP Group Shares Revenue soared on Wednesday as a surge in leisure travel helped the company achieve strong revenue growth across all regions.

By mid-afternoon on Wednesday they were up 11 per cent at 173.9 pence, making them the biggest gainers in the FTSE 250.

SSP, which owns train station and airport food brands such as Upper Crust and Caffe Ritazza, said sales rose 16 percent at constant exchange rates in the three months to June.

Like-for-like revenues rose 6 percent, supported by higher air passenger numbers and lower levels of strikes by UK rail workers.

Contract wins and acquisitions each provided an additional 5 percent boost to the London-based company’s sales.

Approximately half of SSP’s 27 percent revenue growth in North America was due to its acquisitions of Mack II, Midfield Concession Enterprises and ECG Ventures.

The group also benefited greatly in the Asia-Pacific market with the purchase of Airport Retail Enterprises, a major Australian airport restaurant and bar business.

Following this performance, SSP said it was “well positioned” for the peak summer trading season.

In May, chief executive Patrick Coveney said the Paris Olympics and European Football Championships in Germany should boost SSP sales across continental Europe this summer.

SSP has also maintained its full-year guidance, which includes revenue of between £3.4bn and £3.5bn and underlying operating profit of between £210m and £235m.

In the last financial year, the company’s revenue rose by more than a third to £3bn, while its pre-tax profits rose 250 per cent to £88m.

It also secured contract renewals at popular travel hubs such as Heathrow and Gatwick airports.

SSP employs 43,000 people and operates around 600 stores, including Burger King and Starbucks franchises, in 37 countries.

The company initially began life in 1961 as the catering division of Scandinavian airline SAS Group before being acquired three decades later by Compass Group, which later sold it to private equity giant EQT.

It was valued at almost £1bn when EQT decided to list SSP on the London Stock Exchange in 2014.

Russ Mould, investment director at AJ Bell, said: “It has been a tough ride for airport and rail station concessions operator SSP since the pandemic hit, but today’s update suggests it is making tangible progress.”

SSP shares are still down more than two-thirds since the Covid-19 pandemic began.