SSP (“SSP” or “the Group”), a leading operator of food and beverage outlets in travel locations worldwide, issues its Trading Update for the first quarter of its financial year ending 30 September 2018, covering the period from 1 October to 31 December 2017.
SSP has had a good start to the new financial year and has made encouraging further progress in rolling out its strategic initiatives. Total group revenue increased by 13.5% on a constant currency basis, comprising like-for-like sales growth of 2.7%, net contract gains of 8.1%, and the acquisition of TFS, our joint venture in India, adding a further 2.7% to sales. Total group revenue growth at actual exchange rates was 12.2%.
Like-for-like sales growth in the UK and Continental Europe was in line with expectations, driven by the ongoing roll out of strategic initiatives and increasing passenger numbers. In North America sales were driven by robust passenger growth, although at a number of our airports the impact of changes in airline routes and passenger flows seen in the second half of 2017 has continued into the first quarter. In the Rest of the World (including TFS), we continued to see good like-for-like sales growth. Looking forward to the full year, our expectation for like-for-like sales growth for the Group remains unchanged, at between 2% and 3%.
Net contract gains were driven by significant contributions from North America and the Rest of the World. Looking forward, after a good start in the first quarter, an encouraging pipeline of new contracts and the deferral of redevelopments at some of our airports, we now anticipate net contract gains for the Group, including the impact of TFS, to be approximately 4% for the full year.
On December 1st, SSP announced that it had agreed to acquire part of the Stockheim group, a business operating food and beverage outlets in airports and railway stations in Germany. The business had sales of approximately €30m in 2016. The acquisition is expected to complete in early 2018.
Trading results from outside the UK are converted into sterling at the average exchange rates for the year. The overall impact on revenue of the movement of foreign currencies (principally the Euro, US Dollar, Swedish Krona and Norwegian Krone) in the first quarter compared to the same period last year was approximately -1.3%. If the current spot rates were to continue throughout the remainder of FY 2018, we would expect a negative currency impact on full year revenue of approximately -1.5%. This is a translational impact only.
The new financial year has started well and the pipeline of new contracts is encouraging. 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.
Annual General Meeting
The Group’s Annual General Meeting will be held at 11:00am on 27th February 2018, at the offices of Travers Smith LLP, at 10 Snow Hill, London EC1A 2AL.