SSP shares rise 11% on FY25 earnings and evaluation of Europe’s rail network

Shares of travel food retailer SSP Group rose sharply today after the company posted solid FY25 results, highlighting good growth in two of its four regional divisions, and a decision to overhaul its underperforming rail business in mainland Europe.

The food and beverage (F&B) business. Shares closed 11.3% higher in London thanks to a 7.8% increase in sales (at constant exchange rates) to £3.6 billion ($4.8 billion) in the 12 months to September. Operating profit rose 12.7% to £223 million ($298 million).

However, according to statutory IFRS reporting, operating profit fell 58% to £86 million, which SSP said in a statement reflected “£183 million of non-underlying costs and impairments.”

The decision to overhaul its rail business in continental Europe – the largest of the F&B giant’s four divisions by turnover of £1,205 million ($1,607 million) – was welcomed by the market given its weak performance of 2% like-for-like (LFL) growth. There was also a carrot dangling: a reward for shareholders arising from the July IPO of SSP’s Indian joint venture Travel Food Services (TFS) with K Hospitality, India’s largest private F&B company.

SSP Group CEO Patrick Coveney said in a statement: “We recognize that more needs to be done to strengthen our operating performance, particularly in Continental Europe, where we have now reset our team, model and balance sheet and have a range of initiatives underway. In addition, we are launching a comprehensive review of our rail business in Continental Europe. We are also considering options to deliver value for our shareholders in line with the achievement of the TFS free float requirement.”

SSP currently retains a 50.01% stake in TFS and said: “We believe that India’s market potential, combined with TFS’ attractive economic model and market leadership, and a strong, ongoing partnership between SSP and K Hospitality, provides an attractive opportunity for growth and returns for the group.”

Railroad assessment and possible reset

Meanwhile, it looks like Europe’s continental rail sector will be reset. Alvarez & Marsal, a turnaround consultancy, is carrying out the review, which came about as a result of a slower-than-expected recovery in commuter traffic and increasing F&B competition across the network. The results of the evaluation are expected before the SSP interim results in May next year.

The travel F&B player is reshaping its footprint on airports and railways as competitors like Avolta win contracts and introduce new formats such as hybrid retail and F&B stores. In North America, Avolta subsidiary HMSHost has a dominant position, operates approximately 1,000 locations across nearly 80 airports and relies on leisure-driven demand. In Europe, SSP faces other major players, including Lagardère Travel Retail, which operates in retail and F&B, so investors are keeping a close eye on how these rivals compete for contracts.

Just last week, SSP won a major concession for JetBlue’s Terminal 5 at New York’s John F. Kennedy Airport for 10 F&B units. That’s a boost after North American LFL yields flattened in FY25 (down 0.4%), with a decline of 1.9% in the second half. However, in the first eight weeks of FY26 (beginning October 1), trading was more encouraging and was 6% higher than the previous year at constant exchange rates, including a 2% LFL.

Looking ahead for the global business, SSP’s like-for-like revenue growth is currently 4% in the first eight weeks of FY26, with all regions in positive territory. Coveney said: “This early momentum, plus the specific actions we are taking to drive improvements in earnings, cash and returns on capital, gives us increasing confidence for the year ahead.”

SSP’s European Rail Assessment underlines how operators need to adapt more quickly to new travel patterns, such as the increase in leisure passengers – also a trend at airports. For investors, the company’s dual strategy – reducing underperforming assets in Europe and unlocking value in high-growth markets such as India – highlights the balancing act facing global players in the travel and hospitality sector.

* All $ conversions at today’s rate.