Profits fall at Upper Crust and Millie’s Cookies owner SSP as Middle East conflict reduces airport passengers

By ANGHARAD CARRICK, BUSINESS NEWS EDITOR

The owner of Upper Crust and Millie’s Cookies expects annual profits to be lower after a sharp fall in passenger numbers as the Middle East conflict disrupts travel.

SSP, which runs food and drink outlets in travel hubs, told investors it expects operating profits of £230million this year, below initial forecasts, reflecting a ‘backdrop of subdued passengers’.

The Iran war continued to hit sales in regions surrounding the Middle East and in the US, where like-for-like sales rose 2 per cent in the three months to the end of September.

Shares in SSP fell 3 per cent to 182.3, bringing this year’s losses to 11 per cent, and are down 70 per cent from their pre-pandemic peak.

Upper Crust owner SSP expects lower profits as the Iran war continues to disrupt passengers

Chief executive Patrick Coveney said the group had delivered a ‘resilient’ performance despite a ‘challenging environment’.

Total like-for-like sales in the three months to September rose by 4 per cent, lifting full-year revenues to £3.8billion, 5 per cent higher than the previous year.

Passenger numbers in SSP’s Gulf markets rebounded to 90 per cent of pre-war levels, but traffic in the eastern Mediterranean, Asia-Pacific and Indian regions continued to reflect lower local and connecting passenger volumes.

Coveney said: ‘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.’

A 9 per cent increase in sales in the UK and Ireland helped to drive sales in part due to stronger trading over the summer months and improvements to its outlets, including M&S Simply Food shops.

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

The food-to-go business has come under pressure from investors, including Irenic Capital Management, for underperformance.

Last September, the New York hedge fund reportedly encouraged private equity groups to bid for SSP, arguing it could be valued at a 50 per cent premium to its market value.

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