Posted By Uma Rajagopal
Posted on October 3, 2024
By Yamini Kalia
(Reuters) – Upper Crust owner SSP Group warned on Thursday of lower than expected annual profits as a stronger pound and weakness in some European markets offset robust summer trading elsewhere.
The London-headquartered company, which operates cafes, bars and restaurants in train stations and airports in 37 countries, said it saw strong growth in Spain and other Mediterranean holiday destinations, as well as an improvement in Britain.
But its French business struggled during the Paris Olympics.
Non-Olympic tourists and Parisian commuters stayed away from the city, and dwell times in rail stations during the games contracted markedly,” CEO Patrick Coveney told an analyst call.
SSP is addressing its European business issues partly through a phased exit from its underperforming German motorway services business, Coveney added.
Pub groups and restaurant chains saw a boost in sales due to multiple sporting events, including the Olympics, Wimbledon and Euro 2024.
SSP added that if the pound continued to strengthen, earnings in the new financial year would also take a hit.
It forecast core profit of about 335-345 million pounds ($439-$453 million) for the year ended Sept. 30., including the currency impact. Analysts, on average, expected core profit of 351 million pounds, according to a company-compiled consensus.
Shares were down 1.2% at 0846 GMT.
SSP, which said acquisitions contributed about 27% of its fourth quarter sales growth, said it expected no further M&A activity in the near term.
($1 = 0.7624 pounds)
(This story has been refiled to remove attribution to the company, in paragraph 6)
(Reporting by Yamini Kalia in Bengaluru; Editing by Sonia Cheema and Mark Potter)
