SSP shares surge 11% as Upper Crust owner benefits from leisure travel boom
- SSP shares were the FTSE 250 Index's top riser by midday on Wednesday
- The food outlet operator's sales jumped by 16% in the quarter ending June
SSP Group shares shot up on Wednesday as an increase in leisure travel helped the firm deliver strong turnover growth across all regions.
They soared 11 per cent to 173.9p by mid-Wednesday afternoon, making them the FTSE 250's top riser.
SSP, which owns train station and airport food brands such as Upper Crust and Caffe Ritazza, revealed sales jumped by 16 per cent at constant exchange rates in the three months ending June.
On the move: SSP Group shares shot up on Wednesday as increased leisure travel helped the firm deliver strong turnover growth across all regions
Like-for-like revenues expanded by 6 per cent, supported by greater air passenger numbers and lower levels of industrial action by UK railway workers.
Contract gains and acquisitions each provided an additional 5 per cent boost to the London-based company's sales.
Around half of SSP's 27 per cent revenue growth in North America was due to its takeovers of Mack II, Midfield Concession Enterprises, and ECG Ventures.
The group also benefited heavily in the Asia-Pacific market from buying Airport Retail Enterprises, a prominent Australian airport bar and restaurant business.
Following this performance, SSP said it was 'well-positioned' for the peak summer trading season.
In May, its chief executive, Patrick Coveney, said the Paris Olympics and European Football Championships in Germany should bolster SSP's sales across continental Europe this summer.
SSP has also upheld its annual guidance, which includes £3.4billion to £3.5billion in turnover and between £210million to £235million of underlying operating profits.
In the last financial year, the company's revenue rose more than a third to £3billion, while its pre-tax profits jumped by 250 per cent to £88million.
It also secured contract renewals at popular travel hubs like Heathrow and Gatwick airports.
SSP employs 43,000 people and runs around 600 sites, also including Burger King and Starbucks franchises, in 37 countries.
The company initially began in 1961 as the catering division of Scandinavian airline SAS Group before being acquired three decades later by Compass Group, which later sold it to private equity giant EQT.
It was valued at almost £1billion when EQT decided to list SSP on the London Stock Exchange in 2014.
Russ Mould, investment director at AJ Bell, said: 'It's been a rough journey for airport and railway station concessions operator SSP since the pandemic, but today's update suggests it is making tangible progress.'
SSP shares have still declined by more than two-thirds since the Covid-19 pandemic started.
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