Shares of SSP Group plc (LSE:SSPG) rose 12% in early trading after the company maintained its annual guidance following a 16% increase in third-quarter sales, driven by higher demand for leisure travel.
The operator of airport and train station food outlets, including Upper Crust and Ritazza coffee chains, reported a 6% rise in like-for-like revenue.
SSP also said it expects revenue between £3.4 billion and £3.5 billion, underlying core earnings of £345 million to £375 million, and underlying operating profit ranging from £210 million to £235 million.
North America saw a 27% year-on-year sales increase, boosted by acquisitions in the US and Canada. Sales in Continental Europe grew by 7%, while the UK experienced a 12% rise, helped by strong air travel and fewer rail strikes.
In the Asia-Pacific and EEME regions, sales surged 33%, aided by rising passenger numbers and the recent acquisition of ARE in Australia.
"Against the context of recent share price weakness, we would see today’s update as reassuring, with the current depressed valuation failing to capture the embedded growth built into forecasts and the longer-term potential in this structurally attractive market," said broker Shore Capital.
Panmure Liberum, meanwhile, repeated its 'buy' rating and 330p price target, suggesting the stock is undervalued compared with its historical stock market rating and the sector.
In early trading, SSP shares were changing hands for 174.99p, up 18.59p.