Upper Crust owner sees sharp drop in passengers around Middle East travel hubs

Upper Crust and Millie’s Cookies owner SSP has reported a jump in sales in the UK and Ireland but cautioned over a sharp drop in passenger numbers in regions surrounding the Middle East and fewer in the US.

SSP Group, which operates food and drink outlets in travel hubs like train stations and airports, said its financial performance in recent months had been “resilient” in a “challenging environment”.

Revenues totalled £3.8 billion for the year to the end of September, which was 5% higher than the year before.

Over the fourth quarter, between July and September, sales in the UK and Ireland jumped by 9% compared with like-for-like with the same period last year.

This was driven by strong trading over the peak summer period and improvements to its outlets including refurbished Marks & Spencer shops.

SSP operates franchised stores for brands like M&S, Starbucks, Burger King and The Breakfast Club.

However, the FTSE 100-listed company said a sharp contraction in the volume of passengers in the Gulf and in key travel hubs across the region since the Middle East conflict had impacted trading, as well as in the surrounding Eastern Mediterranean, Asia Pacific and Indian regions.

In the fourth quarter, sales rose by 1% across the APAC and EEME region (Asia Pacific, Eastern Europe and Middle East), with passenger volumes returning to 90% of prior-year levels.

Traffic in the surrounding regions nonetheless continued to reflect lower numbers of local and connecting travellers, SSP said.

It also said there had been more subdued passenger numbers through North America in the summer, but that sales grew by 2% year-on-year for the fourth quarter.

SSP told investors that it now expects its operating profit to be slightly lower than expected for the full year, of around £230 million.

Shares in the company were down by around 5% in early trading on Friday following the update.

Patrick Coveney, SSP’s chief executive, said: “We have delivered a resilient Q4 (fourth quarter) trading performance in a challenging environment.

“Despite the significant impact of the Middle East conflict on passenger volumes in APAC & EEME, the strength and diversification of our portfolio leaves us well-positioned to deliver group earnings per share for the year in line with current market expectations.”