SSP GROUP WARNS ON PROFIT AFTER MIDDLE EAST PASSENGER DROP

SSP Group, the company behind Upper Crust and Millie's Cookies, has reported a rise in UK and Ireland sales alongside a warning over a sharp fall in passenger numbers around the Middle East and fewer passengers travelling through the US. SSP operates food and drink outlets in travel hubs such as train stations and airports, running franchised stores for brands including Marks & Spencer, Starbucks, Burger King and The Breakfast Club. SSP's chief executive, Patrick Coveney, said the company had delivered a "resilient" fourth-quarter trading performance "in a challenging environment", according to the firm's update to investors. Shares in the FTSE 100-listed company fell by around 5% in early trading on Friday following the announcement.

Revenue totalled £3.8 billion for the year to the end of September, 5% higher than the previous year, the company said. In the fourth quarter, covering July to September, like-for-like sales in the UK and Ireland rose by 9% compared with the same period last year, which SSP attributed to strong trading over the summer and to refurbishments including upgraded Marks & Spencer outlets. The company said a sharp contraction in passenger volumes in the Gulf and other key travel hubs since the Middle East conflict had affected trading, along with lower numbers across the surrounding Eastern Mediterranean, Asia Pacific and Indian regions. Fourth-quarter sales across the Asia Pacific, Eastern Europe and Middle East region rose by 1%, with passenger volumes returning to 90% of prior-year levels, though SSP said traffic in the surrounding areas continued to reflect lower numbers of local and connecting travellers. The company also reported more subdued passenger numbers through North America over the summer, though sales there grew by 2% year-on-year in the fourth quarter.

SSP told investors it now expects full-year operating profit of around £230 million, slightly lower than previously forecast, according to the company. The firm said this reflected the continuing effect of the Middle East conflict on passenger volumes across the Asia Pacific, Eastern Europe and Middle East region. Coveney said the strength and diversification of SSP's portfolio had helped offset the impact of the reduced passenger numbers in that region. The update did not set out when passenger numbers in the affected regions might recover.