SSP Group has announced its financial results for the year ended 30 September 2022, with a rapid recovery in passenger demand and a return to operating profit.
The operator of F&B outlets in travel locations reported revenue of £614.9m for its UK & Ireland segment, up 223.6% from £190m for the year ended 30 September 2021. UK operating profit was £27.7m, up from a loss of £57.4m in 2021.
UK sales in H1 were 60% of 2019 levels, and recovered over the early months of the year due to steadily improving rail commuter and air passenger numbers, boosted by an extended European summer holiday season.
Sales remained resilient in December despite the Omicron disruption but weakened in January due to work-from-home guidance before recovering in February and March.
Sales continued to improve over H2 and were at 82% of pre-pandemic levels in Q3 and 85% in Q4. Since the year end, SSP reports UK trading has remained at levels similar to Q4.
The operator is increasing its focus on the higher growth markets of North America and Asia, “whilst continuing to grow selectively in the UK, Europe, and Middle East,” according to the update. The current £550m pipeline with result in a shift from 16% of the business represented by North America and Asia Pacific (in 2014) to at least 40% beyond 2025.
Total revenue across segments was £2,185.4m – up 162% from 2021’s £834.2m, and back to 78% of 2019 levels. Profit before tax was £25.2m, compared to a £411.2m loss in 2021.
Operating profit (IFRS 16) was £91.5m, compared to a loss of £309.2m in 2021.
The operator further announced a strong recovery over the year, with revenue 64% of 2019 levels in H1 to 90% of 2019 levels in H2. Revenue was at 104% of pre-pandemic levels in the first eight weeks of the new financial year, with recovery led by strong leisure travel demand over the summer and autumn, according to the update.
CEO Patrick Coveney commented: “This has been a year of strong recovery for SSP, with momentum building strongly through the second half and into our new financial year. Group revenues are now tracking at 104% of 2019 levels, and as revenues have recovered we have delivered good profits and robust cash flows.
“SSP is a fabulous business with strong foundations on which to build. The global air and rail travel sectors are set up for long-term structural growth, consumer demand for quality food offerings in travel locations remains strong, and we have significant head room for growth in multiple markets across the world. In particular, we see significant potential for further expansion in North America - a $6bn market in which we currently only have a 10% market share.
“North America is central to our growth plans, and we envisage it becoming a much bigger part of the Group over the next few years. We are also rapidly building our presence in selected Asia-Pacific markets and continue to expand in a targeted way in the UK, Europe and the Middle East.
“As we finish 2022, I would especially like to thank our outstanding colleagues across the world for the enormous contribution that they make to SSP each and every day. The quality of our people, the resilience of our business model, the support of our client, brand and supply partners, and the structural growth in travel demand mean that, despite the current macroeconomic uncertainty, we remain confident in the future growth and returns prospects for SSP.”
