Despite economic uncertainty, Brexit and the soaring euro, it seems British holidaymakers carry on regardless. Ryanair last week revealed a 10 per cent rise in August passenger numbers, and easyJet was not far behind. Other low-cost airlines and travel firms also experienced good growth.
Our dedication to travel augurs well for SSP, which runs eateries, bars and food shops in airports and train stations around the world.
The company floated at 210p a share in 2014 and Midas tipped the stock in October 2015, by which time the price had already risen to 303p.
SSP operates in 35 countries across Asia, the Middle East, America and much of Europe. The company’s brands include Upper Crust, Ritazza and James Martin Kitchen
Some brokers felt there was little mileage left in the stock, but the business has consistently beaten expectations and the shares have continued to rise.
Today, they are 525p and should rise still further, benefiting from robust market conditions and the highly focused stewardship of chief executive Kate Swann.
SSP operates in 35 countries across Asia, the Middle East, America and much of Europe. The company’s brands include Upper Crust, Ritazza and James Martin Kitchen.
It also runs airport and rail outlets for the likes of Starbucks, Burger King and Marks & Spencer, and it has developed a number of local concepts to suit regional tastes, such as herring in Finnish cafes or noodles in Chinese coffee shops.
In 2015, 40 per cent of group turnover came from the UK. Today that has fallen to about 35 per cent.
Not that UK sales have fallen, but rather because the rest of the group has grown even faster, particularly in the US and Asia.
SSP is the second largest food and drinks operator in the American travel sector and is gaining market share fast, winning contracts in important cities such as New York, Chicago and Phoenix, Arizona.
The company is also making healthy progress in the Asia-Pacific region, operating in Australia, China, Hong Kong, Singapore, Thailand and Taiwan.
It recently began working in India too, where it is expanding at pace.
Over the next two decades, the number of people travelling by air is expected to almost double, with more than 7.2 billion a year taking a plane by 2037.
Economic growth in Asia is the principal reason behind the surge in demand, as local populations use their newfound wealth to take to the skies.
But Swann is not just relying on air traffic predictions to fuel growth. She is also determined to make SSP as efficient as possible, often using technology to keep costs low and deliver value to customers.
At Burger King, for example, punters can order food on a keypad and top up drinks via an automatic dispenser, reducing the need for staff at the counter.
And across the business, state-of-the-art equipment is used to chop, slice, grate and pour food and drink, so fewer assistants are needed in the kitchen. The company is not cutting back on staff, as it is growing substantially – it is just improving productivity.
SSP’s financial year ends on September 30 and brokers expect turnover to rise 15 per cent to £2.3 billion, with profits surging almost 30 per cent to about £140 million.
A dividend of 6.5p is pencilled in, compared with 5.4p last year. Over time, the dividend should show solid growth.
Midas verdict: SSP is a well-run business in an expanding sector. Existing investors should continue to hold. New investors may also fancy snapping up a few shares for the long term.
Traded on: Main Market Ticker: SSPG Contact: foodtravelexperts.com or 020 7543 3300