Travel retail specialist SSP Group has continued to recover strongly from Covid with sales of £3bn – higher than pre-pandemic – and profits of £200m.

The Upper Crust owner posted a 37.7% rise in sales to just over £3bn in its full-year results for the 52 weeks to 30 September.

The figure is 7.7% ahead of 2019 levels and 9.6% up on a constant currency basis. Growth was boosted by price increases and net contract gains as the group continued to open new locations.

Revenue growth accelerated during the year. Sales were up 4.5% on 2019 levels in the first half, as passenger numbers recovered and an extended holiday season in several markets created strong leisure demand.

During the second half of the year, trading continued to strengthen, increasing by 10.3% at actual exchange rates compared with 2019. The rise was driven by a marked recovery in passenger numbers over the summer, particularly in the air sector, as well as the group’s push into digital.

Group underlying operating profit was also up to £204.8m in the 52-week period, compared with £31.7m in the prior year as strong sales growth boosted the bottom line.

For the full year of 2023, the group is planning for like-for-like sales growth of between 6% to 10%, driven by a further recovery in passenger numbers and additional year-on-year price increases, as well as net contract gains of approximately 5%.

This would equate to total sales in the region of £3.4bn to £3.5bn on a constant currency basis for the full year.

In 2024, the group expects to deliver further improvements in EBITDA and operating profit. It anticipates EBITDA to be within the range of £345m to £375m and operating profit to be within the range of £210m to £235m.

SSP Group shares jumped 6.4% on Tuesday and a further 3.5% on Wednesday to close at 234.6p following the strong numbers. However, the shares remain 1.4% down year to date, despite a strong rally since November.

Liberum views the shares as underrated, giving the group a price target of 330p. “SSP has shown strong momentum, driving like-for-like growth while securing new business wins for the future and expanding through acquisitions,”the broker commented.

“Furthermore, geographic exposure is tilting to higher growth markets and air, reducing proportional exposure to more mature market and rail with contractual terms also de-risking with higher variable proportions.”

Shore Capital concurred that the group’s “potential is not yet to be reflected in the equity valuation”.

It commented: “[The results] set out the group’s compounding shareholder growth and returns model, including sales growth ahead of pre-Covid levels, sustainable operating margin enhancement returns to shareholders.”

On a five year basis the stock remains down by almost 60%, having been trading at over 550p before Covid hit in February 2020

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