SSP Group – excellent fodder for investors, shares up 22% over the last week to 178p, TP 300p

Mark Watson-Mitchell - 09.12.2025

The Finals to end-September published last Thursday by the £1.41bn-capitalised SSP Group (LON:SSPG) indicated that the group, which is a leading operator of restaurants, bars, cafes and other food and beverage outlets in travel locations across 38 countries, is really getting its act together.

And its shares, now at 178p, up 32p in the last week, have reflected the market confidence following the results.

The Business

SSP is a global leader in the operation of food and beverage outlets in travel locations, employing around 49,000 colleagues in around 3,000 units across 38 countries.

It specialises in designing, creating and operating a diverse range of food and drink outlets in airports, train stations and other travel hubs across six formats: sit-down and quick service restaurants, bars, cafés, lounges, and food-led convenience stores.

Its extensive portfolio of brands features a mix of international, national, and local brands, tailored to meet the diverse needs of its clients and customers.

The Finals

SSP reported a resilient performance for the year to end-September, with revenue increasing by 6.0% to £3,639m and underlying pre-IFRS 16 operating profits rising by 8.4% to £223m, leading to an underlying EPS of 11.9p.

The company achieved a positive free cash flow of £80m and proposed a dividend of 4.2p per share, reflecting confidence in its future cash generation.

Strategic actions include a £100m share buyback initiated in October 2025 and a focus on accelerating shareholder value delivery in FY26, targeting EPS towards the upper end of expectations and free cash flow exceeding £100m.

The company is also undertaking a review of its Continental European Rail business and considering options to realise value from its stake in the TFS JV.

Management Comment

CEO Patrick Coveney stated that:

"We have delivered a resilient financial performance this year, with revenue and EPS up 8% and 25% respectively, on a constant currency basis, and a pivot to positive free cash flow.

As a result of our actions in the year including an ongoing focus on cost efficiency, we saw strong trading across three of our four regions.

However, 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.

In addition, we are announcing today the launch of a wide-ranging review of our rail business in Continental Europe.

We are also considering options to realise value for our shareholders in line with the delivery of the TFS free float requirement.

While there remains a degree of macro-economic uncertainty across the world, our focus is on what we can control.

We have made an encouraging start to FY26, with LFL sales growth now positive in all regions and tracking at 4% year-to-date for the group as a whole.

This early momentum, together with the specific actions that we are taking to deliver sustained improvements in profit, cash and return on capital, gives us increasing confidence in our prospects for the coming year."

The Equity

There are some 800.8m shares in issue.

The leading holders are HSBC Private Bank (8.46%), Marathon Asset Management (8.24%), Artemis Investment Management (7.59%), Threadneedle Asset Management (5.54%), Schroder Investment Management (4.94%), Causeway Capital Management (3.72%), GIC Pte (3.16%), Franklin Templeton Fund Management (2.72%), The Vanguard Group (2.59%) and JP Morgan Asset Management (2.48%).

Analyst’s Views

At Shore Capital Markets, analysts Greg Johnson and Clive Black, noted that the key takeaways from the results were an improvement in trading at the start of the new financial year, quantifying realised synergies of c£30m, further improvement in ROCE, deeper granularity over European margin delivery and now targeting at least £100m of annual cash flow.

Their current year estimates are for revenues of £3,813m (£3,639m) with adjusted pre-tax profits rising to £212.6m (£192.7m), lifting earnings up to 13.6p (11.9p) and paying out a higher dividend of 4.8p (4.2p) per share.

For the year to end-September 2027, they predict £4,042m in sales, £235.8m profits, 15.4p earnings and a 5.4p dividend.

Anna Barnfather, at Panmure Liberum, rates the group’s shares as a Buy, with a 300p Target Price.

Her estimates for this year are for £3,779m in sales, £215.4m in profits, 13.7p earnings and a 4.8p dividend.

For 2027, she looks for £3,949m sales, £241.2m profits, 16.4p per share in earnings and a dividend of 5.7p.

Going further ahead Barnfather sees 2028 reporting £4,113m sales, £269.9m profits, 18.8p in earnings a doling out a dividend of 6.6p per share.

Elsewhere RBC has raised its Target Price on the shares to 210p (205p) as a ‘sector perform’, while UBS has raised its Target Price to 180p (170p) giving it a ‘neutral’ guidance.

My View

This group’s shares, which have been up to 196p this year and as low as 134p, saw 6 times its daily average dealing volumes last Thursday (4th) and then 5 times that average on Friday, yesterday closing at 178p, some 8.35m shares were traded, nearly 3.6 times the daily average.

That performance tops a rise from 146p at the start of last week.

Expect some profit-taking to throw up some cheaper buying opportunities, however, these shares are going higher.

I now set a Target Price of 220p on the shares.

(Profile 09.12.25 @ 178p set a Target Price of 220p)