SSP: Upper Crust owner’s shares surge after profit soars
Owner of Upper Crust bakery chain SSP Group grew across a number of business lines in its half-year report as revenue soared, despite some headwinds in Europe.
The FTSE 250 firm recorded £45m in operating profit – up 20 per cent growth from the first six months of 2024.
Shares soared nearly four per cent to 173.40p in early trading on Tuesday.
This was driven by a nine per cent jump in group revenue to £1.7bn, which helped offset operating costs of £1.6bn.
In the UK sales were up nine per cent, which drove its operating profit margin – a key metric measuring how much profit a company makes from its core business operations before considering taxes and interest payments – up 120 basis points year-on-year.
Growth in North American sales rose 13 per cent, after its acquisition of the Midfield concessions business.
Greg Johnson, equity analyst at Shore Capital, said: “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.
“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
SSP said it reiterated its full-year guidance, but “not withstanding a greater level of macroeconomic uncertainty”.
The group expects revenue for the year to come in around £3.7bn to £3.8bn, with operating profit around the £230m to £260m mark.
In its half-year report, the company noted its Continental Europe business had lagged behind expectations.
Revenue in the region dipped 0.2 per cent and the group recorded 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 by the group as triggering the downturn.
The group listed “building profitability in Continental Europe” and taking actions to bolster profit margins in the region as a key priority for the second half of 2025.
Patrick Coveney, chief executive of SSP Group, said: “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.
“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.”