A slight dip in half-year revenue at SSP (SSPG) can be blamed on two factors. One is currency movements, which wiped 3.4 per cent off the top-line, and the other is the loss of a high-profile on-board rail contract in 2014. Yet a seemingly small improvement in the travel outlet group's wafer-thin margins had a transformative effect on operating profit - it jumped 28 per cent even if you exclude a raft of restructuring costs last year.
However, finance chief Jonathan Davies warned that tough comparative figures, along with a number of new openings worldwide, would put downward pressure on margins in the second half. "It's a good thing," he insists, because higher opening costs imply plenty of new business contracts.
He is more concerned with handling the situation in continental Europe. Soft consumer spending, a weak euro and strike action in France and Germany left like-for-like sales across the channel flat at the half-way stage. That contrasted with 3.7 per cent like-for-like growth in the UK, and even healthier figures from the smaller US and rest-of-world businesses.
Broker Numis expects pre-tax profit of £77.6m, giving EPS of 11.9p for the current financial year, up from £61.8m and 10.3p respectively.
| SSP (SSPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 303p | MARKET VALUE: | £1.44bn | |
| TOUCH: | 303-304p | 12-MONTH HIGH: | 318p | LOW: 210p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 49p* | NET DEBT: | 150% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 866 | -6.4 | -5.6 | 0.0 |
| 2014 | 859 | 13.8 | 1.6 | 2.1 |
| % change | -1 | +316 | +129 | - |
Ex-div: 4 Jun Payment: 3 Jul *Includes intangible assets of £631m, or 133p a share | ||||
