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Investing.com -- SSP Group PLC (LON:SSPG), the owner of Upper Crust and other travel food brands, posted solid first-half results as strong revenue growth across key regions helped lift profits, despite headwinds in parts of Europe.
The company’s shares rose more than 2% in London trading.
SSP’s operating profit rose 20% to £45 million in the six months to March, supported by a 9% rise in group revenue to £1.7 billion. This helped offset operating costs, which came in at £1.6 billion.
The U.K. saw a 9% increase in sales, which pushed SSP’s operating profit margin up by 120 basis points compared to the same period last year. In North America, revenue climbed 13%, boosted by the acquisition of the Midfield concessions business.
SSP reaffirmed its full-year guidance, though noted it does so “notwithstanding a greater level of macroeconomic uncertainty.” The company expects full-year revenue of £3.7 billion to £3.8 billion and operating profit between £230 million and £260 million.
Performance in Continental Europe lagged, with revenue dipping 0.2% and a reported loss of £3.1 million. The company pointed to “the scale of our contract renewal programme, and a number of operational challenges, including the slower recovery post Covid in the rail sector” as contributing factors.
Looking ahead, SSP has launched a group-wide overhead cost-reduction programme aimed at improving margins in fiscal 2026. This includes a turnaround plan focused on reviving its European operations.
"Recent geopolitical events have led to a heightened level of uncertainty across some of our travel markets, in particular in North America," the company said in a statement.
The group also confirmed that its planned IPO of Travel Food Services in India, originally expected this spring, is now targeted for summer 2025.
"Commentary at the finals / 1Qs and now 2Qs implies that EPS downgrades have troughed, although the macro backdrop is more challenging," Jefferies analysts commented in a note.
"At a 13.4x P/E for FY25E, SSP’s valuation sits at a near 50% discount to the pre-COVID P/E multiple," they noted.