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Travel food to go specialist SSP Group (SSPG) expects to post full-year like-for-like growth of between 2%-3% after a solid fourth quarter, as air travel continues to mitigate weaker rail performance.

SSP Group has issued a pre close trading update, ahead of its financial year ending 30 September 2018, noting that trading in the fourth quarter has been in line with expectations.

Like-for-like sales growth continued in the quarter at a similar level to that seen in the third quarter, with expectations of full-year for-like sales growth of between 2% and 3%.

“Like-for-like sales growth has been driven largely by increased passenger numbers in the air sector,” SSP Group said. “Trading in the rail sector has remained soft during the year.”

Net contract gains for the full year are expected to be around the top end of the previously announced range of 4.5%-5%, driven by strong growth in North America and on-going progress in the Rest of the World.

The acquisitions of TFS in India and Stockheim are expected to add approximately 1.5% to revenue in the full year.

Currency movements, notably the relatively weakness of the pound against a bakset of international currencies, is expected to hit top-line revenues by around 2%.

In terms of outlook, SSP Group said: “Whilst a degree of uncertainty always exists around passenger numbers in the short term, we are well placed to continue to benefit from the structural growth opportunities in our markets and to create further shareholder value.”

Morning update

PZ Cussons (PZC) has issued a trading update ahead of its AGM later this morning, reporting that its first quarter is “in line with expectations” despite challenging conditions in its key market of Nigeria.

The group said overall results for the quarter ended 31 August 2018 have been in line with expectations as good performance in Europe and Asia has offset “challenging trading conditions”.

Overall results were underpinned by a “robust and innovative product pipeline” and “tight control” of costs.

In the UK Washing and Bathing division, an acceleration of the pace of new product launches, together with a consumer engagement programme supported by increased brand investment, is driving “good growth” across the key brands of Imperial Leather, Carex and Original Source.

Similarly “good” growth is being achieved across the portfolio of Sanctuary, St Tropez, Charles Worthington and Fudge, driven by new product launches as well as expansion into new on and offline channels.

It reported solid performance in Australia and Indonesia, but consumer disposable income remains subdued ahead of the general elections in Nigeria in February 2019.

“With prices, volumes and margins continuing to remain under pressure, the business is focussing on optimising price points and sizes across the key brands in the portfolio,” the group said, though its Nutricima business has moved into a breakeven position.

“Europe and Asia continue to perform well, whilst improvement in Africa will largely be dependent on the macro environment in Nigeria during the remainder of the year,” the group summarised.

Listed agri business Origin Enterprises (OGN) has posted a 4.6% rise in full year constant currency operating profits, despite a tightening of margins.

For the year ended 31 July 2018 the business announced a 1.7% increase in operating profits to €71.2m, an increase of 1.7% and a rise of 4.6% on a constant currency basis.

Acquisitions contributed 5.0% to sales growth and 3.6% to operating profit growth in the year on a constant currency basis

Overall group sales were up 9% to €1.63bn.

Reported net profit of €56.8m was up 24.5%, primarily due to a significant reduction of exceptional items

However, group operating margin of 4.4% was a decrease of 20 basis points in the period.

Origin’s CEO Tom O’Mahony said: “Origin achieved a very satisfactory full year result, ahead of guidance, recording a 4.7% increase in adjusted diluted earnings per share and generating €56.6 million in free cash flow. The business performed robustly while supporting our customers manage the operational demands of a highly challenging growing season in 2018.

“It has been a significant year in terms of strategic developments including our entry into the Latin American market. The agreement to acquire Fortgreen and Ferrari Zagatto in Brazil provides tangible growth opportunity in markets that address the Group’s requirements for further geographical diversification and seasonality balance.

“We have seen steadily improving sentiment on-farm over recent months which may be challenged in the UK by the uncertain nature of Brexit and its timing. The group is well positioned to capitalise on its scalable and diversified business platforms, development opportunities and strong cash generation.”

Losses grew in the first half at troubled listed butchery group Crawshaw (CRAW) as organic sales continued to collapse.

Total group revenue was down 1.9% to £21.6m, but group like-for-like sales dropped 13.2% in the period while customer numbers fell by 9.1%.

Gross margin fell back from 42.9% to 39.6% as its EBITDA loss grow from £0.2m to £1.1m and its underlying operating loss from £0.8m to £1.7m.

Total losses before tax in the period grew from £1.2m to £1.7m.

The new management at Crawshaw, which appointed CEO Jim Viggars in May and a new CFO in July has completed a review of the business.

The board said its factory shops “are central to future profitable growth”, having opened 3 new outlets in the current year with ten more planned in 2019/2020 and a further ten in the subsequent year.

However, its 42 high street stores are under pressure due to wider weakness in UK high streets and Crawshaw is “reviewing its structure and investment in traditional high street locations”.

It has also agreed a three-store trial agreed with A.F. Blakemore, the UK’s leading Spar wholesaler and retailer, to commence in October 2018 with a further 12 stores per annum potentially opened depending on the results of the trial.

Crawshaw will also launch a new delivery service and website, emphasising its farm to fork credentials, which will go live in October.

Crawshaw CEO Jim Viggars, said: “Clearly the results for H1 are disappointing, but not entirely a surprise given market conditions and the issues that face a retail estate that has too many high street stores and currently not enough factory stores.

“However, the important issue is the future growth and profitably of Crawshaw. The new management team has identified what it considers to be the key issues and are moving at pace to remedy them on a sustainable basis. This is achievable over the medium term, despite market conditions which include declining high street shopper numbers, increasing convenience and online shopping and retail pricing that is more competitive.

“Our factory stores continue to produce good returns and have substantial room to improve as we get to grips with the supply chain and operational standards. Factory stores are our priority for growth and this is reflected in our plans to open a further 20 stores over the next two years.

“Our strategic partnership with A.F. Blakemore, with 3 trial sites due to open in October, will deliver an enhanced shopping experience for Spar customers as they purchase quality Crawshaw branded product at low prices. This should generate new customers for the trial Spar stores and provide existing customers with an improved value shopping basket. Convenience shopping is growing significantly and this route to market will complement our own Factory store rollout.

“Taking Crawshaw online by utilising our bespoke butchers’ shop WF Burtons of Pocklington provides another new route to market. This will enable us to reach many more consumers who choose online shopping as part of their shopping repertoire. Our key point of difference will be providing a farm to fork Givendale British beef range of high-quality cuts at market leading prices.”

On the markets this morning, the FTSE 100 has relatively flat at 7,505.2pts.

SSP Group has opened down 3.1% to 693.7p as the City hoped for a stronger sales lift.

PZ Cussons is up 2.9% to 236.2p so far this morning, Crawshaw is up 19.4% back to just 3.9p.

Other early risers include Imperial Brands (IMB), up 6.5% to 2,667p, Hotel Chocolat (HOTC), up 1% to 347p and Tesco (TSCO), up 0.7% to 243.1p.

Fallers so far include AG Barr (BAG), down 1.7% to 715p, Marston’s (MARS), down 1.1% to 98.1p and Hilton Food Group (HFG), down 1% to 960p.

Yesterday in the City

The FTSE 100 ended the day up 0.7% to 7,507.6pts as oil prices rose further to new four-year highs.

Hotel Chocolat (HOTC) ended the day up 1.8% to 343.5p after announcing a surge in first half sales and pre-tax profits as new store openings and international ventures offset cost increases.

Irn Bru producer AG Barr (BAG) edged down 0.4% to 727p despite shrugging off the sugar tax and CO2 shortage to raise first half profits by 4%, as sales were buoyed by investment and innovation into core brands.

Meanwhile, the City gave a luke-warm reception to the news that current COO Jack Bowles will become the new CEO of British American Tobacco (BATS) when Nicandro Durante steps down next year. The tobacco giant’s shares fell 1.7% to 3485.5p on the news.

Risers yesterday included Just Eat (JE), up 4.1% to 684.2p, Greencore (GNC), up 3.1% to 183p, Devro (DVO), up 2.7% to 210.5p, Compass Group (CPG), up 2.2% to 1,669p, Science in Sport (SIS), up 2.1% to 72.5p and Finsbury Food Group (FIF), up 2% to 126.5p.

Fallers included McBride (MCB), down 2.4% to 147.4p, DS Smith (SMDS), down 1.2% to 476.7p, Britvic (BVIC), down 1% to 782p, Greene King (GNK), down 0.9% to 498.7p and Ocado (OCDO), down 0.8% to 905p.

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