British food service company SSP Group PLC (GB:SSPG) raised its profit forecast for FY24 and resumed its dividend payments, attributing the positive shift to a recovery in air travel and increased passenger spending on food. SSP’s FY23 revenue surged by 38% to £3 billion, while EBITDA almost doubled to £280 million. The SSP share price gained 4.15% at the time of writing today, recovering from a three-year low touched in October 2023.
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The company stated that the recovery in its operations has pushed its revenue beyond the levels attained before the COVID-19 pandemic. Pre-tax profits increased by 250% to £88 million.
SSP Group PLC is a prominent provider of food and beverage services in the travel sector, primarily operating in airports and railway stations. The company owns a portfolio of more than 500 brands and operates in around 600 locations worldwide.
Favourable Outlook and the Return of Dividends
Moving forward, SSP Group anticipates that travel demand will remain robust. It provided a positive outlook for both sales and profits for FY24. The company now expects its revenue to reach £3.4 to £3.5 billion for the fiscal year 2024. EBITDA is expected to grow between £345 and £375 million.
In light of its recovery and solid numbers, SSP announced the resumption of dividend payments, declaring a final dividend of 2.5p per share. The company suspended dividend payments in 2020, following a final dividend of 6.0p per share for FY19.
Is SSP a Good Stock to Buy?
Post-results, analyst Darragh O’Sullivan from Jefferies reiterated his Buy rating on the stock, predicting an upside of 53%. Analyst Mark Irvine from Stifel Nicolaus confirmed his Hold rating with a forecast of 20% growth in the share price.
On TipRanks, SSPG stock has received a Strong Buy rating based on eight Buys and one Hold recommendation. The SSP share price target is 302.2p, which is 36% higher than the current trading levels.
