London / UK. (ssp) SSP Group PLC, a leading operator of food and beverage brands in travel locations worldwide, announces its financial results for the year ended 30 September 2018. Highlights:
- Underlying operating profit(1) of GBP 195.2 million: up 22.7 percent at constant currency(2), and 19.8 percent at actual exchange rates.
- Revenue of GBP 2,564.9 million: up 9.5 percent at constant currency, and 7.8 percent at actual exchange rates.
- Like-for-like sales(3) up 2.8 percent: driven by growth in air passenger travel and retailing initiatives.
- Strong net gains(4) of 1 percent: driven by North America and the Rest of the World.
- Underlying operating margin(1 )up 70 basis points, at constant currency and excluding the acquisition impact of TFS in India, driven by further progress on our strategic initiatives. The acquisition impact added a further 10 basis points bringing the underlying operating margin to 7.6 percent.
- Underlying profit before tax of GBP 4 million: up 24.0 percent. Reported profit before tax of GBP 182.9 million, up 26.3 percent.
- Underlying basic earnings per share of1pence: up 23.6 percent. Reported basic earnings per share of 24.9 pence, up 27.7 percent.
- Final dividend of 5.4 pence per share, bringing the full year ordinary dividend to 10.2 pence per share: up 25.9 percent, reflecting a payout ratio of 40 percent.
- Underlying operating cash inflow(5) of GBP 90.2 million, after another record year of investment of GBP 144.2 million in the business.
- Encouraging pipeline, with significant new contracts underpinning future growth, including at Montparnassestation in Paris, 29 Starbucks stores in the NS rail estate in the Netherlands, at Rio de Janeiro and Sao Paulo Guarulhos International Airports in Brazil, at Goa International Airport in India and in North America, at San Francisco and Seattle Airports.
- Proposed c. GBP 150 million special dividend and share consolidation, underpinning confidence in the business.
Commenting on the results, CEO Kate Swann said: «SSP has delivered another strong performance in 2018. Operating profit was up 22.7 percent at constant currency, driven by good like-for-like sales growth, substantial new contract openings and further operational improvements. We have continued to expand our global footprint, materially extending our presence in North America, delivering excellent growth in India and entering the important Latin American region with two contracts in Brazil. The new business pipeline is encouraging and underpins our confidence in future growth. Our cash flow is robust and, in addition to investing GBP 144 million into the business this year, our highest to date, we are also returning circa GBP 150 million cash to shareholders. The new financial year has started in line with our expectations and, 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.»
- Stated on an underlying basis which excludes the amortisation of intangible assets arising on the acquisition of the SSP business in 2006 and the revaluation of the obligation to acquire an additional 16 percent ownership share of TFS.
- Constant currency is based on average 2017 exchange rates weighted over the financial year by 2017 results.
- Like-for-like sales represent revenues generated in an equivalent period in each financial year in outlets which have been open for a minimum of 12 months. Like-for-like sales are presented on a constant currency basis.
- Net contract gains / (losses) represent the net year-on-year revenue impact from new outlets opened and existing units closed in the past 12 months. Net contract gains / (losses) are presented on a constant currency basis.
- Stated on an underlying basis after capital expenditure, net cash flows to/from associates and non-controlling interests, acquisitions and tax.