SSP Group, the airport and rail station food operator, has launched a share buyback of up to £50 million after fourth-quarter like-for-like sales rose 4%.
The FTSE 250 group, which runs outlets such as bars, cafés and restaurants in travel hubs, said full-year earnings per share should be around 14.0p, up about 18% and in line with market expectations.
Part of that rise comes from lower than planned minority interest and tax charges.
Operating profit is expected to be slightly lower than planned at around £230 million, partly because of subdued North American passenger numbers over the summer.
Chief executive Patrick Coveney told investors: "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, we expect to drive a very material year-on-year underlying improvement.
"Given this, in combination with our leverage returning towards the lower end of our target range, we are pleased to be announcing a £50m share buyback programme today, in line with our capital allocation priorities.”
UK leads, Gulf lags
UK and Ireland like-for-like sales rose 9% in the quarter, helped by strong summer trading.
North America grew 2% and Continental Europe 3%.
Asia Pacific, the Eastern Mediterranean and the Gulf, grouped as APAC & EEME, managed only 1% as passenger numbers fell after the Middle East conflict began at the end of February.
Gulf like-for-like sales fell 10%, although passenger volumes there have recovered to 90% of last year's levels.
Full-year revenue is about £3.8 billion, up 5% at constant currency.
Cash and margins
Free cash flow after interest is expected to be around £70 million, an improvement of £140 million to £150 million in underlying terms.
Coveney said that figure would land modestly below earlier expectations.
Operating margin in Continental Europe should rise to about 3% from 2.2%, as SSP works through a recovery plan in France and Germany.
The buyback follows leverage returning towards the lower end of SSP's target range of 1.5 to 2.0 times.
