SSP Reports Profits Surpassing Pre-Pandemic Levels

SSP Group, a global operator of restaurants and café outlets located in airports and railway stations, has announced that its full-year profits have exceeded pre-pandemic levels for the first time since COVID-19 disrupted the industry.

The company, which manages brands like Upper Crust and Caffè Ritazza, reported annual adjusted profits of £343 million for the fiscal year ending September, a significant rise from £280 million the previous year and surpassing the £326 million recorded in 2019.

While growth was seen in three of its four markets, the group faced challenges in continental Europe, where operating profits plunged 49% to £18 million, despite a 6% increase in sales to £1.21 billion.

Operations in continental Europe were adversely affected by railway strikes and lackluster trading at motorway services in Germany. The company initiated a phased exit from its unprofitable motorway services business in Germany last December, which reported an underlying loss of £3.8 million for the year.

SSP identified that industrial action within the European rail system, coupled with costs incurred from additional staff hired for expected higher volumes during the Paris Olympics that did not materialize, significantly impacted profits in that region.

To improve its performance in continental Europe, the company has outlined a five-point recovery strategy, aiming to elevate operating profit margins in the region to 3% by the 2025 financial year from the current 1.5%, with a long-term goal of achieving 5%.

Patrick Coveney, SSP’s Chief Executive, stated, «As we enter the next phase of our post-COVID evolution, our attention is directed towards maximizing value from a more robust foundation.

«In continental Europe, we are expediting our profit recovery initiatives while also focusing on enhancing our performance culture across the broader group to foster profitable growth and returns.»

Pre-tax profits rose by 35% to £119 million, alongside revenue growth of 14% to £3.43 billion.

The company’s shares climbed by 11.4%, or 18.5p, to 181p on Tuesday morning. Despite the recovery, the shares remain at a significant 73% discount compared to the 600p they reached prior to the onset of the COVID-19 pandemic. During the pandemic, SSP raised over £700 million from shareholders.

Performance in the UK and Ireland exceeded expectations, with like-for-like sales increasing by 11% to £893 million and operating profits surging 26% to £73 million.

In North America, sales grew by 6% to £814 million, with operating profits up 47% to £81 million. Meanwhile, the Asia Pacific, Eastern Europe, and Middle Eastern markets reported a 17% increase in sales to £519 million, alongside a 20% rise in operating profits to £76 million.

Operating approximately 2,700 outlets at 180 airports and 300 railway stations across 35 countries, SSP boasts around 550 brands, including proprietary concepts like Upper Crust and Caffè Ritazza, as well as franchises such as Burger King and Starbucks. The company employs around 35,000 staff members worldwide.

Due to its extensive international operations, currency fluctuations pose an ongoing challenge, impacting all sales outside the UK when converted to sterling. The fluctuations in currency values in 2024 compared to 2023 resulted in a 2.5% decline in sales and a 5.8% decrease in operating profit.

For fiscal year 2025, SSP anticipates like-for-like sales growth between 4% and 5%, along with additional sales contributions from recently completed acquisitions and a minor negative impact from the ongoing exit of the German motorway services division.