SSP Group (LSE:SSPG), the travel food and beverage operator behind concessions in airports and rail stations worldwide, said on Friday it remains on track to deliver full-year earnings per share of approximately 14.0p for the year ended 30 September, up around 18% on the prior year and in line with current market expectations.
Fourth-quarter like-for-like sales rose 4%, with group revenue up 4% year-on-year on a constant currency basis, despite a significant contraction in passenger numbers in its APAC & EEME region since the Middle East conflict began at the end of February.
For the full year, group revenue reached approximately £3.8bn, up around 5% year-on-year on a constant currency basis, made up of like-for-like growth of approximately 4% and net contract gains of around 1%.
Operating profit is expected to come in slightly lower than planned, at approximately £230m, reflecting subdued North American passenger numbers through the summer, though management said this will be offset at the net income level by lower-than-planned minority interests and tax charges.
Performance varied sharply by region in the fourth quarter.
The UK and Ireland delivered like-for-like sales growth of 9% on strong summer trading, while North America grew 2% on a like-for-like basis, outperforming the market against a backdrop of subdued passenger numbers.
Continental Europe posted like-for-like growth of 3%, with the region on track for a step up in operating margin to approximately 3% for the year, up from 2.2% in the prior year, as the company's turnaround plan in France and Germany progresses.
APAC & EEME, which includes Asia Pacific, the Eastern Mediterranean and the Gulf, managed only 1% like-for-like growth, with Gulf passenger volumes rebounding to 90% of prior-year levels after the conflict's onset, while Asia Pacific and the Eastern Mediterranean continued to see weaker local and connecting traffic.
Free cash flow for the full year, post-interest, is expected to total approximately £70m, which the company said represents a £140m to £150m improvement in underlying cash generation year-on-year, with no incremental use of supply chain financing.
"While we expect free cash flow to land modestly below our prior expectation for FY26, we expect to drive a very material year-on-year underlying improvement," said chief executive Patrick Coveney, adding that this, combined with leverage returning towards the lower end of its target range, supports the new buyback.
With leverage expected to move back towards the lower end of SSP's medium-term target range of 1.5 to 2.0 times, the company is launching a new share buyback programme of up to £50m, following completion of its previous buyback.
SSP will release its full-year results on 8 December.