2025 half year results announcement

H1 PERFORMANCE IN LINE WITH EXPECTATIONS; FULL YEAR GUIDANCE MAINTAINED

SSP Group plc, a leading operator of restaurants, bars, cafes and other food and beverage outlets in travel locations across 38 countries, announces its financial results for the half year ended 31 March 2025.

Group Financial Highlights (underlying pre-IFRS 16, unless otherwise stated)

• Revenue of £1.7bn, up 9% at actual exchange rates and 12% on a constant currency basis, with like-for-like sales growth of 5%
• Operating profit of £45m, up 20% at actual exchange rates and 31% on a constant currency basis, in line with expectations. Operating margin accretion of 40bps (on a constant currency basis)
• Loss per share of 0.4p; improved in comparison to loss of 1.0p per share in the prior year, with stronger operating profit partially offset by higher finance charges  
• Free cash outflow of £(161)m, reflecting SSP’s usual trading seasonality and the second half weighting of sales, profit and working capital, as well as the first half phasing of capital spend
•  Seasonally higher net debt of £764m and leverage of 2.2x at end of March 2025. Second half cash generation expected to reduce leverage towards the lower end of the medium-term target range of 1.5-2.0x by year end
• Interim dividend of 1.4p per share, an increase of 0.2p per share year-on-year
• Statutory IFRS underlying operating profit of £68m compared to £58m in the prior year. IFRS statutory operating profit was £15m, down 74% compared to the prior year primarily due to non-cash IT transformation costs as well as recognition of impairments in France and Italy
• Statutory IFRS loss per share of 7.7p, compared to a loss of 1.3 per share in the prior year, primarily as a result of the costs noted above

Divisional Performance Highlights (underlying pre-IFRS 16, on a constant currency basis)

• North America: Sales up 13% reflecting a strong contribution from net gains and acquisitions of 11%; operating margin down 90bps YoY, but improved YoY after adjusting for the release of Covid provisions in the prior year
• Continental Europe: Sales up 3% with operating margin enhancement of 80bps YoY; significant change programme underway in France and Germany to improve profitability; today re-affirming plan to build operating margin from 1.5% of sales in FY24 to c.3% this year and c.5% in the medium-term
• UK: Sales up 9% including strong like-for-like sales growth of 8%, driving operating profit margin enhancement of 120bps YoY
• APAC & EEME: Sales up 38%, including like-for-like sales growth of 13% and a 24% contribution from acquisitions; operating margin strong at 11.8%, but down 210bps YoY as anticipated, principally due to the deconsolidation of the AAHL joint venture in India

Outlook

•  Full year guidance maintained, notwithstanding a greater level of macroeconomic uncertainty. Planning scenarios remain: revenues of £3.7-3.8bn, operating profit of £230-260m, EPS of 11.5-13.5p on a constant currency basis. If current FX rates were to be maintained throughout the rest of the financial year, EPS would be between 11p and 13p
• Group LFL sales growth of 5% in first six weeks of H2 with strong LFL in APAC & EEME and the UK offsetting the recent impact of reduced passenger numbers in North America, following geopolitical events
•  IPO of our business in India, TFS, has received ‘in principle’ regulatory clearance, with marketing and investor education progressing well, and is now targeted to complete this Summer

Accelerating programme to drive profitability, capital discipline and returns

• Clear and specific actions to: turn around profitability of Continental Europe, generate cost efficiencies, accelerate returns from investments and increase cash generation
• Launch of substantial group-wide overhead cost reduction programme to be delivered through the second half to underpin delivery of margin and returns progression in FY26 
• Further tightening of capital expenditure as we build returns; now planning for capital spend in FY25 of less than £230m, while maintaining underlying net gains target of c.4%; planning for capex spend in FY26 of less than £200m, driven by a lower level of renewals and growth capex consistent with our medium-term guidance for net gains of 2-4%
• Strong cash generation anticipated in the second half would leave us on track to consider a share buyback programme towards the end of the calendar year
• Performance of recent acquisitions strong and returns in line with or ahead of expectations

Commenting on the results, Patrick Coveney, CEO of SSP Group, said:

“We recognise the importance of driving enhanced performance, and we are executing against our agenda to achieve this. Our accelerated actions include a decisive turnaround plan for our Continental European business, a programme to deliver the full benefits of recent strategic and capital investments and a further step up in initiatives to deliver cost efficiencies. As a result, notwithstanding the higher level of macroeconomic uncertainty, we are maintaining our full-year guidance.

“Given the resilience of our business and the strong foundations that we have built in growing food travel markets across the world, we continue to see significant opportunities for SSP to drive compounding growth and to build margins and returns in the medium and long term.”

CURRENT YEAR OUTLOOK

Current trading

Group like-for-like sales during the first six weeks of the second half of the year (from 1 April to 11 May) grew by 5% on a constant currency basis, including a benefit from the later timing of Easter. In APAC & EEME, LFL sales of 14% in the period reflected ongoing growth in passenger numbers across the region. In the UK, LFL sales in the period were 10% including a modest impact in our M&S units as a result of their well-reported systems issues. In Continental Europe, LFL sales in this period grew by 2%, whilst in North America LFL sales fell by (2)% following recent geopolitical events.

Planning assumptions

Recent geopolitical events have led to a heightened level of uncertainty across some of our travel markets, in particular in North America. While we believe that our geographically diversified business model means that SSP is more resilient to fluctuations in travel and consumer spending than other consumer sectors, both in terms of our operational flexibility and traveller behaviour, we believe it is prudent to plan for a degree of ongoing uncertainty of demand through the second half. 

In this environment, we are accelerating our programme of initiatives to drive improved margins, cash conversion and investment returns. We believe that these initiatives, in combination with sustained, strong demand in many regions of the group, leave us well-positioned to mitigate the current uncertainty. As a result, we are maintaining our full-year guidance.

We continue to plan for revenue to be in the region of £3.7-3.8bn with a corresponding underlying pre-IFRS 16 operating profit within the range of £230-260m and EPS of between 11.5p and 13.5p (all on a constant currency basis). As usual, the seasonality of travel means that the majority of our profitability for the year is set to be delivered in the second half.

If the current spot rates (as of 13 May 2025) were to continue through 2025, we would expect a negative currency translation impact on revenue and operating profit of 1.9% and 4.2%, compared to the average rates used for 2024, which is the basis of the constant currency guidance above. At today’s FX rates this would result in EPS for the full year of between 11p and13p.

MEDIUM-TERM OUTLOOK

We expect that global demand for travel is well set for long-term structural growth. In the medium-term, we expect to generate sustainable growth and enhanced shareholder returns as follows:

PLANNED IPO OF TRAVEL FOOD SERVICES

On 10 December 2024, we announced the planned initial public offering of Travel Food Services (TFS), in its home market of India. Full details can be found in the press release here. Since that date, a period of market and investor education has progressed well, and in late April, we received ‘in principle’ clearance to proceed with the IPO from SEBI, the Indian market regulator.

Given recovering Indian stock market conditions, completion of the IPO process is now targeted for the Summer. In advance of completion, we plan to publish an updated prospectus. As previously disclosed, to maintain SSP’s control and consolidation of TFS, we plan to make a purchase of additional shares in TFS (representing 1.01% of TFS’ issued share capital) at a value referenced to the IPO price. Further updates will be given in due course, as appropriate.

1 Stated on an underlying basis, which excludes non-underlying items as further explained in the section on Alternative Performance Measures (APMs) on pages 22-26. 

2 Underlying EBITDA (on a pre-IFRS 16 basis) is the underlying pre-IFRS 16 operating profit excluding depreciation and amortisation.

3 We have decided to maintain the reporting of our profit and other key financial measures like net debt and leverage on a pre-IFRS 16 basis. Pre-IFRS 16 profit numbers exclude the impact of IFRS 16 by removing the depreciation on right-of-use (ROU) assets and interest arising on unwinding of discount on lease liabilities, offset by the impact of adding back in charges for fixed rent. This is further explained in the section on Alternative Performance Measures (APMs) on pages 22-26.

4  A reconciliation of Underlying operating profit/(loss) to Free cashflow is shown on page 20.

5  Net debt reported under IFRS 16 includes lease liabilities whereas on a pre-IFRS 16 basis lease liabilities are excluded. Refer to ‘Net debt’ section of the ‘Financial review’ for a reconciliation of net debt.

6  Constant currency for FY25 is based on average FY24 exchange rates weighted over the financial year by 2024 results. Constant currency for FY25 is based on FY24 exchange rates.

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A presentation and live webcast will be held at 9am (UKT) today, and details of how to join can be accessed at:

SSP — Food Travel Expert (foodtravelexperts.com)