SSP Group, the owner of Upper Crust bakery chain, has reported growth across several business areas in its half-year report, with revenue soaring despite some challenges in Europe.
The FTSE 250 company posted an operating profit of £45m, marking a 20 per cent increase from the first six months of 2024, as reported by City AM.
Shares jumped nearly four per cent to 173.40p in early trading on Tuesday. This was fuelled by a nine per cent surge in group revenue to £1.7bn, which helped counterbalance operating costs of £1.6bn.
In the UK, sales rose by nine per cent, pushing its operating profit margin – a crucial measure of how much profit a company generates from its core business operations before accounting for taxes and interest payments – up 120 basis points year-on-year. North American sales also saw a 13 per cent rise, following its acquisition of the Midfield concessions business.
Greg Johnson, equity analyst at Shore Capital, commented: “We see today’s interim results as encouraging and supportive of the medium-term view that SSP can deliver ‘through the cycle’ double-digit CAGR EPS growth.”
He added: “We do not believe that the current low teens PER valuation fairly reflects the structural attractions of the global travel market whilst the outlook for cash generation has strengthened, which should be further supportive of the rating as well as shareholder friendliness.”
SSP notes macroeconomic uncertainty
Despite reiterating its full-year guidance, SSP noted a “not withstanding a greater level of macroeconomic uncertainty”.
The group forecasts annual revenue to be in the region of £3.7 billion to £3.8 billion, with operating profit projected between £230 million and £260 million.
In its report for the first six months, the firm acknowledged that performance in Continental Europe had not met expectations. Revenue in Europe decreased slightly by 0.2 per cent and the group faced a loss of £3.1m.
“The scale of our contract renewal programme, and a number of operational challenges, including the slower recovery post Covid in the rail sector,” were cited as reasons for the financial setback by the company. For the latter half of 2025, enhancing profitability in Continental Europe and improving profit margins are earmarked as critical objectives.
Chief Executive of SSP Group, Patrick Coveney, expressed: “We recognise the importance of driving enhanced performance, and we are executing against our agenda to achieve this… As a result, notwithstanding the higher level of macroeconomic uncertainty, we are maintaining our full-year guidance.”
He further added, “Given the resilience of our business and the strong foundations that we have built in growing food travel markets across the world, we continue to see significant opportunities for SSP to drive compounding growth and to build margins and returns in the medium and long term.”
