Travel food and beverage concessions operator SSP Group is confident in continued growth, as Group sales hit £871 million/$1.1 billion in the first four months of its 2023 financial year to 31 January.
The result surpasses 2019’s performance by three percentage points (103%), with revenues up versus pre-Covid levels in North America, Continental Europe and the Rest of the World, according to a statement.
It read: “While we continue to face macroeconomic uncertainty, we believe that the travel food and beverage sector will remain structurally resilient to pressures on consumer spending and that our global footprint, with rising exposure to the North American and Asia Pacific regions, will deliver sustained growth.
“The new financial year has started well as we have maintained revenue momentum and have actively mitigated inflationary pressures to deliver a strong conversion of sales to profitability.”
Pax recovery speeds progress
Sales gains have been quickened by a further recovery in passenger numbers, buoyed by strong leisure travel demand over the extended holiday season, the statement continued.
“This momentum continued through the autumn and into the winter, demonstrating a resilience to the broader pressures on consumer spending. Business and commuter travel also continued to recover, albeit at a slower pace.”
New business in North America, India, Malaysia and Thailand, accompanied contract extensions and renewals.
As reported, SSP secured four contracts to roll out 19 retail units –17 of which are the company’s hybrid convenience and F&B ‘Point’ outlets – in airports in Norway including at Oslo, Bergen, Trondheim and Stavanger.
Approximately two thirds of sales from net new business openings in a secured pipeline are expected to come from the North America and Rest of World regions, it adds.
Revenues are estimated to be in the region of £2.9-3 billion with corresponding EBITDA (pre-IFRS 16) in the region of £250-280m for 2023, in line with SSP’s planning assumptions detailed during its preliminary results in December.
The planning assumptions include a contribution from its pipeline of new outlets which, once fully mobilised, will add approximately £550m to revenues by 2025, versus 2019.
Patrick Coveney, CEO of SSP Group, said: “We have headroom for further growth and returns in multiple markets across the world.
“In particular, we see significant momentum and potential to accelerate expansion across the North America and Rest of World markets where revenues are now growing rapidly and which together are expected to account for approximately 40% of the Group by 2025. In addition to this we continue to expand in a targeted way in the UK, Europe and the Middle East.”
In January, SSP published its Sustainability Report which focuses on three main areas: serving its customers responsibly, protecting the environment, and supporting colleagues and communities.
Among its ambitions is achieving net zero carbon emissions (scopes 1, 2 and 3) by 2040 aligned to the Science-Based Targets initiative.
The company has already eliminated single-use plastic from approximately 80% of its own brand packaging and reduced direct scope 1 and 2 emissions by 36% from its 2019 baseline.