Upper Crust owner hikes guidance as booming US trade helps offset UK strike hit

Upper Crust owner SSP has hiked its annual earnings guidance thanks to an ongoing bounce-back in travel and soaring trade in the US, but revealed rail strikes held back progress in the UK.

The group, which runs food outlets at transport sites including airports and railway stations, said it swung to a £15.8 million pre-tax profit in the six months to March 31, against losses of £2.3 million a year earlier.

It said sales surged by 64.1% year-on-year and were 104% of pre-Covid levels in 2019, as it received a boost from the travel recovery and its expansion across the US.

The group saw sales in North America reach 124% of levels seen in 2019, making the region its strongest performer.

SSP said in light of the pace of recovery in passengers travelling and strong performance across the US, it now expects annual underlying earnings to be at the upper end of previous guidance for between £250 million to £280 million.

Shares in the firm lifted more than 3% on Tuesday afternoon trading.

SSP said: “The continued improvement in our trading performance in recent months has been encouraging and has been driven by a further recovery in passenger numbers.

“The recovery is being led by domestic and leisure travel across both the air and rail sectors, with business and commuter travel also recovering, albeit more slowly.”

But in the UK and Ireland, sales lagged the wider recovery due largely to industrial action on the rail networks, and were around 85% of 2019 levels across the first half.

SSP said sales improved during February and March to around 89% of 2019 levels, with the recovery picking up further since the half year, to some 94% of 2019 levels during the first six weeks of the third quarter, helped by strong trading across airports over the Easter holidays.

The UK and Ireland posted underlying earnings of £18.1 million in the first half against losses of £3.7 million the year before.

SSP added: “Whilst we continue to face macroeconomic uncertainty, we believe that the travel food and beverage sector will remain structurally resilient to pressures on consumer spending and that our global footprint, with increasing exposure to the North American and Asia Pacific regions, will enable us to deliver sustained growth.”