SSP plans Europe rail review despite posting FY revenue growth

SSP Group has announced it is preparing to review its rail operations in Continental Europe, despite reporting an 8% rise in revenues to £3.6bn in the year to 30 September.  

It comes as the travel F&B operator aims to accelerate returns to investors in the year ahead. 

During the period, SSP saw underlying operating profits jump 13% on a constant currency basis to £233m, with margin growth of 30 basis points. 

Free cash flow before dividends reached £80m, supported by a £99m working capital inflow and capital expenditure of £212m. Meanwhile, net debt fell to 1.6 times EBITDA, which is at the lower end of the group’s guided range.

Nevertheless, SSP maintains that it has delivered “a resilient financial performance”, citing growth in three of its four regions. 

Patrick Coveney, chief executive of SSP Group, said: “We acknowledge there is more to do to strengthen our operational performance, most notably in Continental Europe where we have now reset our team, model and balance sheet, and have a range of initiatives underway.

“We are announcing today the launch of a wide-ranging review of our rail business in Continental Europe. We are also considering options to realise value for our shareholders in line with the delivery of the TFS free float requirement.”

Looking to the new financial year, the company said trading had strengthened in the first eight weeks to 25 November, with revenue up 6% on a constant currency basis and like-for-like sales up 4%. Growth in North America shifted back into positive territory.

Coveney added: “This early momentum, together with the specific actions that we are taking to deliver sustained improvements in profit, cash and return on capital, gives us increasing confidence in our prospects for the coming year.”

SSP is targeting more than £100m of free cash flow before dividends in 2026 and further progress towards its medium-term aim of a 20% return on capital.