(Reuters) -Upper Crust owner SSP Group said on Thursday it expects annual operating profit to be at the lower end of its previous forecast range, as a slowdown in passenger growth and weakness in Europe curbed growth.
Although total sales rose 4% in the fourth quarter, helped by growth across North America, the UK and Ireland, sales in its largest market Continental Europe fell 3% as consumer spending slowed and the group exited unprofitable units in Germany.
Annual like-for-like sales growth also slowed to 2% from 6% last year.
“While performance in Continental Europe has gained momentum, we do not expect profitability for the region in the year to be where we had originally planned it to be,” the group said in a trading update.
The group, which operates food outlets at airports and train stations worldwide, has been working to turn around its business in Europe, including reviewing its Italian operations and considering exits from loss-making contracts.
“While we have made good progress with many of the initiatives that we have underway, more still needs to be done,” said CEO Patrick Coveney.
The London-based company expects growth strategies, including a substantial reduction in overhead costs, to support an operating profit margin of more than 3% for the fiscal year ending September 2026.
The company now expects 230 million pounds ($307.39 million) in operating profit for the year ended September 2025 on a constant-currency basis, compared with its previous forecast of 230 million to 260 million pounds.
Panmure Liberum analysts expect medium- to long-term travel demand to be resilient despite the current uncertainties, and said they believe SSP is well positioned to benefit as it continues to gain market share.
SSP also initiated a 100 million-pound share buyback programme on Thursday.
Shares, which have fallen about 8% year-to-date, were trading almost flat, as of 0811 GMT.
($1 = 0.7482 pounds)
(Reporting by Raechel Thankam Job and Nithyashree R B in Bengaluru; Editing by Subhranshu Sahu)
