Upper Crust owner SSP Group has launched a “wide-ranging review” of its rail business in Continental Europe as it looks to revive a chronic underperformance in the region.
The review will “consider and assess all potential options” with an update expected by May next year.
“We have not delivered adequate returns on our rail investments in Continental Europe,” said SSP in its annual results, highlighting a “disappointing pace” of recovery since Covid lockdowns.
While the group’s revenue was up 8% to £3.6bn, sales in Continental Europe dipped by 0.2% in the year to 30 September. This pushed the European business to a £47.9m loss while profits in the whole group rose 12.7% to £223m.
SSP blamed the slow return of passenger numbers since Covid and an increase in competition for its struggles in the region.
“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 to do so,” said CEO Patrick Conveney.
SSP set out a plan in December 2024 to raise its profit margin in Continental Europe from 1.5% in 2024 to 3% in 2025 and around 5% in the medium-term. It fell short of its target last year with a profit margin of 2.1% and is now targeting 3% in 2026.
This was due to a weak performance in France and Germany, it said, driven in part by the “scale of the interventions we deemed necessary to deliver a sustainable improvement.”
Elsewhere, however, Conveney praised a “resilient” performance across the group with strong trading in its other three regions – North America, UK and Ireland, and Asia Pacific.
In the first eight weeks of the new financial year, revenue is up 6% most notably due to improved momentum in North America.
In the UK, SSP refurbished its franchised M&S stores with new layouts, tills, and signage. Despite the impact of the M&S cyber incident in the spring, these stores saw an average 10% sales uplift in the year year.
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