Upper Crust owner SSP announces £100m share buyback
Upper Crust owner SSP Group this morning announced plans to buy back £100m of shares as it reported sales grew this year due to an increase in air and rail passengers.
The figures
SSP Group, which has around 2,800 outlets at global transport hubs, said like for like sales were up 1.9 per cent due to a growth in passenger numbers.
Read more: SSP shares slump on economic uncertainty warning
Revenue increased 7.8 per cent to £2.79bn in the year ended 30 September.
Profit before tax also jumped 7.8 per cent to £197.2m.
Basic earnings per share were 28.1p, up 12.9 per cent on the previous year.
Why it is interesting
SSP said it will return up to £100m to shareholders through a share buyback programme demonstrating its “confidence in the business and commitment to maintain an efficient balance sheet.”
The programme began this morning and will end no later than 20 November 2020.
The company, which also owns the Ritazza chain, reported that like-for-like sales saw stronger growth in the rail sector, although its outlets at railway stations benefited from a lower level of disruption compared to last year.
SSP cited headwinds such as the Gilet Jaunes protests in france, the impact of airport redevelopments in Spain and the Nordic countries, the grounding of the Boeing 737, weaker Chinese passenger numbers and the cancellation of Jet Airways routes in the Asia Pacific region.
Like-for-like sales growth in 2020 is expected to be flat at just below two per cent, as the company anticipates facing many of the same challenges next year, along with the expectation of airline capacity cuts.
Read more: SSP takes hit from Boeing 737 max ban
During the year the company took control of all the Jamie Oliver restaurant units at Gatwick Airport following the collapse of the celebrity chef’s casual dining empire.
Today SSP announced the proposed acquisition of Red Rock’s food and drink business in Perth and Melbourne airports.
What SSP Group said
“We continue to grow our business in North America, and have made good progress expanding in continental Europe,” said chief executive Simon Smith.
“In the rest of the world, we have grown in India and the Philippines, and have entered Brazil, a new market for us, with further market entries planned in Bermuda, Bahrain and Malaysia.
“The new business pipeline is strong across all our geographies both this year and next, and we’ve announced a £100m share buyback which further demonstrates our confidence in the future of the business.
“The new financial year has started in line with our expectations and, whilst a degree of uncertainty always exists around passenger numbers in the short-term, we continue to be well placed to benefit from the structural growth opportunities in our markets and to create value for our shareholders.”