SSP Group (SSPG) took off during the first half, with like-for-like sales up 2.9 per cent thanks to a particularly good period for new contract wins at airports in North America, including Boston and Montreal, and in Asia Pacific, including Beijing and Hong Kong, which underpinned net contract gains of 3.4 per cent.
The group also expanded into India in October last year through the £57.9m purchase of a stake in Travel Food Services Private Limited (TFS), which operates in more than 200 locations in domestic and international air terminals and in railway stations. SSP currently owns 33 per cent of TFS, but this is set to increase to 49 per cent by the end of 2018.
A more efficient labour force, including a better scheduling system for workers, contributed to a 50 basis point improvement in the group operating margin to 4 per cent (at constant currencies) as SSP prepares to deal with rising wages. But management warned that like-for-like sales growth could slow in the second half of the year if travellers shy away from travel on economic and geopolitical fears.
Analysts at Numis expect pre-tax profits of £131m in the year to September 2017, giving EPS of 18p, up from £107.5m and 15.5p in FY2016.
| SSP GROUP (SSPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 471p | MARKET VALUE: | £2.24bn | |
| TOUCH: | 470.8-471.1p | 12-MONTH HIGH: | 475.9p | LOW: 260.5p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 70p* | NET DEBT: | 97% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 897 | 22.2 | 2.9 | 2.5 |
| 2017 | 1,073 | 33.0 | 3.8 | 3.2 |
| % change | +20 | +49 | +31 | +28 |
Ex-div: 1 Jul Payment: 3 Jul *Includes intangible assets of £717.6m, or 151p a share | ||||
