Upper Crust owner SSP warns on profit as Iran war hits tourism

SSP, the owner of food outlets such as Upper Crust, Millie's Cookies, and Caffè Ritazza, has cautioned that its profits will be affected by the ongoing Iran war, which has led to a "significant contraction" in global tourism. The catering company, a FTSE 250 group, revealed that it anticipates full-year profits to be slightly lower than expected, around £230 million. Consequently, its shares dropped by approximately five percent to 176.5p in early trading.

While the company's like-for-like sales rose by four percent in the three months leading up to the end of September, SSP's sales growth in the Asia Pacific, Eastern Europe, and Middle East region was only one percent. This decline was attributed to a slowdown in tourism in the region. Chief Executive Patrick Coveney noted that the company's diversified portfolio is well-positioned despite the impact of the conflict on passenger volumes in the Asia Pacific and Eastern Europe and Middle East regions.

Passenger numbers in the Gulf region have returned to nearly 90 percent of pre-war levels, although volumes in nearby areas continue to be lower due to reduced local connections. Analysts at Panmure Liberum, who have a 'buy' recommendation on the stock, described SSP's performance as "resilient" given the challenging circumstances.

The catering group also pointed to subdued passenger numbers in North America as another factor affecting its sales. Like-for-like sales in the region grew by two percent during the quarter. However, the UK and Ireland emerged as the standout performer, with nine percent like-for-like sales growth attributed to strong summer trading and a robust customer proposition.

Coveney emphasized that SSP is making significant strides in embedding stronger and sustainable cash generation across the business. Although the company anticipates free cash flow to be modestly below expectations for the full year of 2026, it expects a substantial year-on-year improvement in underlying performance. SSP operates around 3,000 outlets at travel hubs in 55 countries, including its own brands like Upper Crust and Camden Food Co, as well as franchises for Burger King and Starbucks.