SSP Group PLC (LON:SSPG) saw its shares fall on Wednesday as news that Kate Swann will be stepping down as its chief executive officer after more than five years offset news of a rise in full-year profits.
The company said Swann – formerly CEO of WH Smith Group PLC (LON:SMWH) - will leave her role at the end of May 2019 and will be succeeded by Simon Smith, who is currently the UK and Ireland CEO.
READ: SSP sees annual sales uplift boosted by growing air passenger numbers
The firm, which operates food and beverage outlets in travel locations, saw its underlying pre-tax profit increase by 24% to £184.4mln in the year to 30 September, as revenue rose by 9.5% to £2.6bn.
SSP highlighted an "encouraging" pipeline, with significant new contracts underpinning future growth, including at Montparnasse station in Paris, 29 Starbucks stores in the NS rail estate in the Netherlands, at Rio de Janeiro and Sao Paulo Guarulhos International Airports in Brazil, and in North America, at San Francisco and Seattle Airports.
Commenting on the results, Kate Swann said: "We have continued to expand our global footprint, materially extending our presence in North America, delivering excellent growth in India and entering the important Latin American region with two contracts in Brazil.
“The new business pipeline is encouraging and underpins our confidence in future growth. Our cash flow is robust and, in addition to investing £144m into the business this year, our highest to date, we are also returning circa £150m cash to shareholders.”
She added: "The new financial year has started in line with our expectations and, whilst a degree of uncertainty always exists around passenger numbers in the short term, we continue to be well placed to benefit from the structural growth opportunities in our markets."
Special dividend shows confidence
The group is paying a final dividend of 5.4p per share, taking the full-year ordinary dividend to 10.2p, up 25.9%.
In addition, SSP also announced the payment of a special dividend totalling around £150mln, which is said reflected "underpinning confidence in the business".
In early morning trading, SSP shares were 7.3% lower at 635p.
In a note to clients, analysts at Shore Capital said it was disappointing to hear that Swann was leaving.
However, they added: "Although we expect a negative reaction from the market today (given the rating), we see many similarities with WH Smith, where the culture embedded should see the group continue to deliver further efficiencies against a backdrop of favourable structural growth opportunities in global travel."
Shore Capital repeated a ‘buy’ rating on SSP shares.