SSP Group Plc Shares Surge After Steady Full-Year Results

Shares of SSP Group Plc (LON:SSPG) rose over 11% on Tuesday following its full-year results, which met expectations and reinforced confidence in growth.

The travel food and beverage company reported FY24 earnings per share of 10.0p, aligning with consensus estimates. RBC Capital Markets noted, "We expect growth this year to be supported by a strong pipeline of space coming online."

The company had FY sales of £3.4 billion and a pre-IFRS-16 EBITDA of £343 million, closely matching market forecasts. A full-year dividend of 3.5p was also announced, meeting expectations. SSP's net debt stood at £593 million, slightly better than projections.

Regional performance varied; the UK exceeded profit expectations, while Continental Europe and Asia-Pacific performed slightly weaker than anticipated. North America aligned with forecasts.

Early trading data for FY25 indicated strong growth, with revenues showing 13% year-over-year growth in constant currency, supported by a 5% like-for-like sales increase.

For FY25, SSP is guiding sales of £3.7-3.8 billion on a constant currency basis and pre-IFRS-16 operating profit of £230-260 million. This translates to EPS guidance of 11-13p, in line with consensus of 12.1p.

The guidance reflects the impact of a recent joint venture with Adani Airports in India, which may unlock growth in the expanding Indian aviation market.

The company is also implementing a five-point recovery plan for Continental Europe aimed at improving operating margins from 1.5% to 5% in the medium term.

Despite ongoing cost pressures, particularly from labor, RBC analysts foresee operational leverage from enhanced digital focus, expecting margins in Continental Europe to improve under new leadership.