Moodie Davitt snapshot: SSP Q1 Trading update 2017-18 FY
– Group revenue +13.5% (+12.2% at constant currency)
– Like-for-like sales +2.7%
– Net contract gains +8.1%
– Share in India’s TFS adds +2.7% to sales
– Full-year sales growth projected at +2-3%
– Full-year net contract gains projected at +4%
Source: The Moodie Davitt Report
UK/INTERNATIONAL. Travel sector food & beverage SSP today issued a positive trading update for its first quarter ended 31 December 2017.
Total group revenue increased by +13.5% on a constant currency basis (+12.2% at actual exchange rates). This comprised like-for-like sales growth of +2.7%, net contract gains of +8.1%, and the acquisition of a majority share in Travel Food Services (TFS), the company’s joint venture in India, adding a further 2.7% to sales.
SSP said it has had a good start to the new financial year and has made encouraging progress in rolling out its strategic initiatives.
Like-for-like sales growth in the UK and Continental Europe was in line with expectations, driven by the continued roll-out of strategic initiatives and increased passenger numbers.
In North America, sales were driven by robust passenger growth, although at some airports the impact of changes in airline routes and passenger flows seen in the second half of 2017 has continued into the first quarter.
In the Rest of the World (including TFS), SSP continued to see good like-for-like sales growth. SSP’s full-year expectations for like-for-like sales growth remains unchanged, at between 2% and 3%.
Net contract gains were driven by “significant” contributions from North America and the Rest of the World. After a good start in the first quarter, an encouraging pipeline of new contracts and the deferral of redevelopments at some airports, SSP now anticipates net contract gains for the Group, including the impact of TFS, to be approximately +4% for the full year.
As reported, on 1 December, SSP announced that it had agreed to acquire part of the Stockheim group, a food & beverage business operating in German airports and railway stations. The business had sales of approximately €30 million in 2016. The acquisition is expected to complete soon.
SSP converts trading results from outside the UK into pounds sterling at the average exchange rates for the year. The overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Swedish Krona and Norwegian Krone) in the first quarter compared to the same period last year was approximately -1.3%, the company said. If the current spot rates were to continue throughout the remainder of FY2018, SSP expects a negative currency impact on full year revenue of approximately -1.5% (a translational impact only).
“The new financial year has started well and the pipeline of new contracts is encouraging,” SSP concluded. “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.”
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The company also organises the annual Airport Food & Beverage (FAB) Conference & Awards. This year’s FAB will be held in Helsinki on 20 to 22 June. Click here for details.