SSP shares slip after warning on economic uncertainty and airline cuts

Shares have sunk at travel retailer SSP after the Upper Crust owner warned that “economic uncertainty” and cuts in airline capacity could have an impact on the business.

The retail group said it will have to tackle “ongoing economic uncertainty and the expectation of airline capacity cuts” in the next financial year.

However it held firm on targets for the current year, as it said group revenue is expected to have risen 7.8% over the fourth quarter.

It said like-for-like sales for the three months to September 30 are expected to have risen 1.8%, as overall revenue was boosted by new contract wins.

The Caffe Ritazza owner said it took momentum from the third quarter into the most recent period.

It said that, despite the collapse of Thomas Cook and strikes by Ryanair and British Airways pilots, the UK air sector was “fairly resilient” over the past three months.

SSP said it saw a “softer” performance at its UK rail sites, but benefited from a lower level of disruption across the rail network.

Contract gains have been driven by significant growth in North America and continental Europe, SSP said, as well as its expansion into Brazil for the first time.

However, it said like-for-like sales in continental Europe have been held back by slower passenger growth and airport redevelopment in the Nordic countries and Spain.

Elsewhere, the company said strong sales in Egypt and the Middle East have been offset by the collapse of Jet Airways in India, and weaker Chinese passenger numbers amid the protests in Hong Kong.

The company said: “Despite the many external challenges, particularly towards the end of the year, SSP has performed well and guidance for full-year 2019 remains unchanged.

“Looking into 2020, many of these challenges will remain, as well as ongoing economic uncertainty and the expectation of airline capacity cuts.

“That said, the diversity of the business and flexibility of the model leave us well placed to benefit from the significant structural growth opportunities in our markets and to create further value for shareholders.”

Shares in the company dropped 3.7% to 643p in early trading.

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