SSP Group expects higher second-half revenue but stronger pound to bite
Reuters
Published Sep 21, 2023 07:28
Updated Sep 21, 2023 10:53
By Anchal Rana
(Reuters) - SSP Group forecast a 22% rise in second-half revenue on Thursday but warned that a stronger pound would affect core profit in 2024, sending shares in the British operator of food outlets at train stations and airports down 8%.
Increased air travel and price hikes have helped the London-listed company, which has its own brands such as Upper Crust and franchises for Starbucks (NASDAQ:SBUX) and Burger King, to boost sales, especially in North America.
International travel reached around 90% of pre-pandemic levels this year, according to the International Air Transport Association.
However, SSP said that "reflecting the strengthening of sterling against most of our major currencies since December 2022, at current FX rates the transition impact would be to reduce FY2024 EBITDA (core profit) by approximately 6%".
The group's major currencies include the U.S. dollar, the euro, the Norwegian and Swedish crowns, and Indian rupee.
JPM analysts said SSP might see a downgrade to market consensus on 2024 forecasts due to foreign exchange fluctuations.
Foreign exchange speculators increased their net long positions in the pound in the week ending July 18 to the largest against the U.S. dollar since June 2014.
According to a company-compiled consensus, SSP is estimated to report revenue of 3.4 billion pounds ($492 million) and 366 million pounds in core profit for full-year 2024.
The company, whose stock was top loser on FTSE 250 index at 0938 GMT, reaffirmed its annual outlook and said revenue for the 16 weeks ending Sept. 30 on a constant currency basis would be 116% of 2019 or pre-pandemic levels.
($1 = 0.8135 pounds)
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Written By: Reuters
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