SSP Group PLC: announces first half 2023 trading update

London / UK. (ssp) British SSP Group PLC, a leading operator of restaurants, bars, cafes and other food and beverage outlets in travel locations across 36 countries, announces its financial results for the first half of its 2023 financial year, covering the six months ended 31 March. The Group reports a strong performance, as the global travel market has continued to recover. SSP is making good progress on strategic priorities, putting us in an even stronger position to benefit from the long-term structural growth in the industry.

Financial Highlights

  • Revenue of GBP 1,318.4m (2022: GBP 803.2m), up 64.1 percent versus last year and at 104 percent of 2019 levels, underpinned by the continued recovery in passenger travel volumes
  • Underlying Ebitda of GBP 90.5m, on a pre-IFRS 16 basis (2022: GBP 14.7m). Underlying operating profit of GBP 34.4m, on a pre-IFRS 16 basis (2022: loss of GBP 36.4m)
  • On a reported basis (under IFRS 16) operating profit of GBP 48.6m, including charge for non-underlying items of GBP 3.8m (2022: GBP 26.0m profit, including credit for non-underlying items of GBP 78.6m)
  • Profit before tax of GBP 15.8m, on a reported basis under IFRS 16 (2022: loss of GBP 2.3m). On a pre-IFRS 16 basis, underlying profit before tax of GBP 22.8m (2022: loss of GBP 55.3m)
  • Basic loss per share of 1.3 pence on a reported basis under IFRS 16 (2022: 1 pence). On a pre-IFRS 16 basis, underlying basic loss per share of 0.8 pence (2022: 8.4 pence)
  • Free cash outflow of GBP 118.1m (2022: outflow of GBP 30.9m), after GBP 94.3m capital investment to support contract renewals and the mobilisation of the new unit pipeline
  • Net debt of GBP 1,200.8m, which includes lease liabilities of GBP 808.7m. On a pre-IFRS 16 basis, net debt of GBP 392.1m, up from GBP 296.5m at 30 September 2022 with leverage (Net debt: LTM Ebitda, on a pre-IFRS 16 basis) of 1.8x
  • Liquidity position strong, with cash and undrawn committed facilities of GBP 516.7m at 2023/03/31.

Business Highlights

  • First half revenue at 104 percent of 2019 levels, underpinned by the continued recovery in passenger numbers
  • In the first six weeks of H2, sales have continued to strengthen to 111 percent of 2019 levels including a strong Easter period, with increasing levels of holiday and leisure travel as we approach the summer
  • Tight control of our cost base, including the management of significant and ongoing inflationary pressures, has enabled us to achieve a strong recovery in first half Ebitda margin to 6.9 percent (compared with 1.8 percent last year), in line with the margin recovery set out in our planning assumptions (in our 2022 Full Year Results)
  • Ebitda of GBP 90.5m (on a pre-IFRS 16 basis) driven by very strong performances in our North American and Rest of the World divisions
  • High level of contract renewal activity and net new business wins running ahead of pre-Covid levels; returns on invested capital planned to be in line with pre-Covid levels
  • Notable wins in H1 at airports in Calgary, Ontario, New York (JFK), Kuala Lumpur and at Rome rail station, with Italy becoming our 37th market
  • Pipeline of net new business strengthened, with approximately GBP 75m net new business won since the preliminary results in December 2022, increasing the expected annual sales value of net gains since 2019 from approximately GBP 550m to approximately GBP 625m, once fully mobilised by 2026
  • Free cash usage of GBP 118.1m, including capital investment of GBP 94.3m as we accelerate the mobilisation of our new unit pipeline and contract renewal programme
  • Good progress on our strategic priorities:
    • Accelerated growth in North America and Asia Pacific being underpinned by an increasing pipeline of net gains, with two thirds within North America and Rest of the World
    • The acquisition of the concessions business of Midfield Concession Enterprises Inc. in North America will add 40 new units across seven airports, four of which are new locations to SSP
    • Ongoing strengthening of our business capabilities including our customer proposition, our digital technology platform, and our sustainability and people programme

Chief Executive’s Statement

Commenting on the results, CEO Patrick Coveney said: «This has been a strong first half for SSP, and the ongoing revenue momentum across the business means that we are now expecting our performance for 2023 to be at the upper end of our previous assumptions.

«We are continuing to deliver against our strategic priorities. Firstly, we are increasing our focus on the higher growth markets of North America and Asia Pacific. North America is our strongest performing region with revenues in the first half at 127 percent of 2019 levels, and we were delighted to announce the acquisition of 40 units across seven airports in the USA from Midfield Concessions earlier this month. Secondly, the ongoing enhancement of our capabilities across our customer proposition, digital technology, people and sustainability is driving like-for-like revenue growth and helping us to win more new business. Thirdly, we are revitalising our efficiency programme to support profit conversion.

«As ever, I would like to thank our clients and brand partners and not least our outstanding teams around the world for their contribution to this performance. Their ability to provide compelling food propositions for both clients and customers across the world is what sets this business apart. This deeply ingrained skill set, along with the long-term structural growth trends in the travel markets that underpin our business model, means that we continue to look to the future with confidence.»