Upper Crust bakery owner SSP Group saw its profits surge in the first half of the year, despite geopolitical turmoil causing “a heightened level of uncertainty” in several markets.
The FTSE 250 company, which also owns Caffè Ritazza, said its operating profits rose 20% to £45m in the six months to 31 March, while revenue was up 9% to £1.6bn in the period.
SSP’s North American sales rose 13%, while the UK and Ireland saw a 9% jump. In Europe, the group’s biggest market, sales were up 3%.
This was despite recent geopolitical events triggering a heightened level of uncertainty and meaning fewer passengers were now travelling, especially in North America, the company said.
“While we believe that our geographically diversified business model means that SSP is more resilient to fluctuations in travel and consumer spending than other consumer sectors…we believe it is prudent to plan for a degree of ongoing uncertainty of demand through the second half.”
In North America, like-for-like sales fell 2% during the first six weeks of the second half because of “recent geopolitical events”.
In the UK, sales rose 10%, though the business felt a “modest impact” in its Marks & Spencer units due to the retailer’s cyberattack.
SSP has decided that amid the greater macroeconomic uncertainty, it will delay a planned float of its joint venture in India, instead looking to launch in the summer once India’s stock market has had more time to recover.
It said that “notwithstanding a greater level of macroeconomic uncertainty”, it is still forecasting full-year revenue between £3.7bn and £3.8bn, and operating profits between £230m and £260m.
The company said it was accelerating plans to “simplify and scale back” support costs across the group, to help reduce duplication and complexity.
“We recognise the importance of driving enhanced performance, and we are executing against our agenda to achieve this,” said CEO Patrick Coveney.
“Our accelerated actions include a decisive turnaround plan for our Continental European business, a programme to deliver the full benefits of recent strategic and capital investments and a further step up in initiatives to deliver cost efficiencies.”
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