Upper Crust Owner SSP Offers Bullish Profit Outlook On Strong Travel Demand
SSP Group flagged upbeat annual profit expectations on Tuesday 23 May, as summer travel and increased traffic in North America underpinned robust demand in the transit outlets of the owner of eatery Upper Crust.
Shares in the London-headquartered company, which operates food and beverage outlets at train stations and airports in 37 locations, were up 3% in morning trade on Tuesday 23 May.
Sales at restaurants and stores in transit locations have rebounded as business and leisure travel are back to pre-pandemic levels, while companies like SSP raised prices to keep up with high costs.
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North America market revenues in the first half of the year were at 127% of 2019 levels, with the region on its path to being the largest revenue contributor to the group, the company said.
However, its UK and Ireland market, which has relatively larger rail operations than other regions, lagged, partly hurt by strikes, with recovery at 85% of pre-pandemic levels.
Recovery in rail since COVID has been slower than the recovery of air, CEO Patrick Coveney said in an interview with Reuters.
He added that the air business in the UK was witnessing the positive recovery trends that were seen in its channels and other markets.
The company has partnered with brands Breakfast Club and independent craft brewer BrewDog in the UK, where it expects to open three outlets this year, with the first signature BrewDog bar at Gatwick Airport.
The group expects core profit for the year to come at the upper end of its expectation of £250 million-£280 million. Analysts on average expect a core profit of about £271 million, according to a company-compiled consensus.
Statement By eToro Analyst
“If it can continue its current trajectory, we can see further share price gains over the coming 12 months,” Mark Crouch, analyst at social investing network eToro, said in a note.
Read more: Upper Crust Owner Gets Travel Recovery Boost, But Inflation A Worry
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