SSP reinstates interim dividend but profits drop

(Sharecast News) - Upper Crust and Ritazza owner SSP was under the cosh on Tuesday as it reinstated its interim dividend but posted a drop in first-half profits. In the half year to the end of March, pre-tax profit fell to £12.8m from £15.8m in the same period a year earlier, while revenue rose 15% to £1.5bn, with double-digit growth across all regions.

Like-for-like sales grew 12% during the half, with a "very strong" performance in APAC and EEME, reflecting strengthening passenger numbers. There were also net gains of 4% from the mobilisation of the company's new contract pipeline and a contribution of 3% from acquisitions in North America.

SSP hailed "good" underlying EBITDA growth in the UK, as it benefited from a further recovery in passenger numbers and despite some ongoing impact from industrial action in the rail sector.

In Continental Europe, however, profitability was held back by a heightened level of renewals, particularly in the Nordics countries, and greater levels of industrial action in the rail sector in France and Germany.

SSP reinstated its interim dividend at 1.2p a share.

Chief executive Patrick Coveney said: "Trading momentum has continued into the second half, and we are confident in delivering on our expectations for the full year. In particular, we are well set to capitalise on what we anticipate will be a Summer of strong demand in all our markets - including Continental Europe, where the Olympics and the European Championships will help boost footfall in airports and stations. We will also start to realise the benefit of our latest value-creating acquisition in Australia and new market entries in New Zealand and Indonesia.

"As a business we are making good progress on our strategic priorities, thanks to the hard work and commitment of all our colleagues and the support of our clients and brand partners around the world. With our continued momentum and foundations in place for further expansion, we remain confident in our ability to deliver sustainable, compounding growth and returns for all our stakeholders in the years to come."

At 0935 BST, the shares were down 6.6% at 194.90p.