Travel food and beverage retailer SSP Group (SSPG) maintained its full-year guidance after upbeat Q1 trading. The group said the positive momentum of the 8 weeks to 25 November had continued through the quarter.
| Share price: 197.6p (+1.3%) | PE: 14.3x |
| Market cap: £1.57bn | Yield: 2.6% |
STRONG ORGANIC GROWTH
Across the group, which runs restaurants and bars at train stations and airports worldwide, like-for-like sales rose 5%. Growth was almost a repeat performance of the same prior-year quarter when LFL sales increased 6%.
North American growth was 1%, but the firm continued to expand its share in the 57 airports where it operates. As a result, total sales rose 4% despite the impact of the US government shutdown.
Growth in the UK & Ireland was 8%, which is impressive given sales were up 9% a year earlier. The firm singled out its airport and Marks & Spencer (MKS) stores at airports and train stations.
The fastest growth came in Asia Pacific and Emerging Markets where like-for-like sales rose 14%. Adding in market share gains and acquisitions, total sales rose 41% with Australia a particular stand-out.
OUTLOOK CONFIRMED
Given the positive momentum of the first quarter, the firm has reiterated its guidance for the FY to September 2026. As a reminder, excluding buybacks the company sees FY26 EPS at the top end of its 12.9p to 13.9p range.
‘We have made a good start to the financial year,’ said chief executive Patrick Coveney. ‘We are on track against our ‘Focus 26’ operational plan to deliver sustained improvements in profitability, cash and returns on capital.’
Another strong trading update from Upper Crust owner SSPG, but will it be enough for the shares to push on? To us, it looks as though they have already broken out of their post-Covid downtrend.
The firm is confident in its 13.9p EPS target for FY26, while we estimate sales could be around £3.8 billion. That compares with £2.8 billion before the pandemic which shows how far the group has come.
However, pre-pandemic EPS were 29p so there is still a long way to go. Current momentum is good, though, and we can’t argue with the valuation.
Read the press release here: https://www.foodtravelexperts.com/investors/
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