Investing.com -- SSP Group PLC (LON:SSPG), the airport and rail food concessions operator, said on Friday it was on track to meet full-year earnings expectations despite a hit to passenger numbers from the Middle East conflict, and launched a new £50 million share buyback.
The company expects full-year earnings per share of about 14 pence, up about 18% from a year earlier and within its guided range. It said lower-than-planned minority interest and tax charges helped the figure.
Passenger numbers in its Asia Pacific, Eastern Mediterranean and Gulf region have contracted significantly since the conflict began at the end of February.
The buyback follows completion of the previous programme and fits SSP's capital allocation strategy. The company expects its debt relative to earnings to return towards the lower end of its 1.5-2x medium-term target range.
"We have delivered a resilient Q4 trading performance in a challenging environment," Chief Executive Patrick Coveney said.
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Group sales in the quarter to September 30 rose 4% at constant currency, with like-for-like sales, which compare outlets open in both periods, also up 4%. Full-year revenue was about £3.8 billion, up about 5%.
UK & Ireland like-for-like sales rose 9% on strong summer trading. North America rose 2% despite subdued passenger numbers. Continental Europe rose 3%, though total sales were flat because of the staged exit from the German motorway services business.
In the Asia Pacific, Eastern Mediterranean and Gulf region, like-for-like sales rose 1%, including the effect of lower passenger numbers in the Gulf and key travel hubs.
Gulf passenger numbers have rebounded strongly and are now at 90% of prior-year levels, though Gulf like-for-like sales still fell 10%. Traffic in the Eastern Mediterranean, Asia Pacific and India remains lower because of fewer local and connecting passengers.
SSP expects operating profit of about £230 million, slightly lower than planned because of subdued North American passenger numbers through the summer. It expects lower-than-planned minority interests to offset that at net income level.
Free cash flow after interest is expected to be about £70 million, modestly below its prior expectation. Capital investment is expected at about £170 million, as some projects have been rescheduled into FY27.
In Continental Europe, the operating profit margin is expected to rise to about 3% from 2.2% a year earlier, with Coveney citing "good progress turning around performance in France and Germany."
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