Upper Crust owner SSP warns on profit as Iran war hits tourism
SSP, the owner of travel food outlets like Upper Crust, has warned it will take a hit to its profit after the Iran war caused a “significant contraction” in global tourism.
The catering group, which also owns Millie’s Cookies and Caffè Ritazza, said the sharp drop in travel caused by the Middle East conflict has hit sales at its food outlets at train stations and airports.
The FTSE 250 group told shareholders it expects full-year profit to be “slightly lower than planned,” at about £230m. Shares in the firm dipped by about five per cent to 176.5p in early trading.
Like-for-like sales at the firm rose by four per cent in the three months to the end of September.
But SSP’s sales growth in the Asia Pacific, Eastern Europe and Middle East region came in at one per cent, which chief executive Patrick Coveney blamed on a slowdown in tourism.
“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,” he said on Friday.
SSP ‘resilient’ despite travel slowdown
Passenger numbers in the Gulf region have rebounded to roughly 90 per cent of pre-war levels, but Coveney said traffic in the surrounding areas “continued to reflect lower and local connecting passenger volumes”.
Analysts at stockbroker Panmure Liberum, which has a ‘buy’ recommendation on the stock, said SSP is delivering a “resilient outcome against a challenging backdrop”.
Alongside the tourism slowdown, the catering group pointed to a “backdrop of subdued passenger numbers” in North America. Like-for-like sales in the region grew by two per cent in the quarter.
The UK and Ireland was SSP’s standout performer in the period, delivering nine per cent like-for-like sales growth due to “strong summer trading and the strength of our customer proposition”.
Coveney said: “We are making significant progress embedding stronger and sustainable cash generation across the business. While we expect free cash flow to land modestly below our prior expectation for [full-year 2026], we expect to drive a very material year-on-year underlying improvement.”
SSP runs about 3,000 outlets at travel hubs in 55 countries. As well as its own brands like Upper Crust and Camden Food Co, the group operates franchises for Burger King and Starbucks.