Swann’s restaurant group has recipe for success

IN 1996, people living in the UK took 26 million holidays abroad. The number rose to 45 million last year and it will almost certainly be higher still in 2018. Most of those travellers ate or drank at an outlet run by SSP

Group, which operates bars, restaurants and cafes ranging from Upper Crust and Ritazza to Yo! Sushi and Burger King to the James Martin Kitchen and Le Grand Comptoir.

Originally focused on UK train stations and airports, the company now operates around the world including the US, Brazil, the Philippines and most of Europe.

Floated on the stock market at £2.10 in 2014, the shares were recommended by Midas a year later at £3.03. On Friday, they closed at £6.46 and are likely to continue gaining ground.

SSP has been led for the past five years by Kate Swann, pictured, who is one of the most highlyregarded chief executives in the retail trade. Swann gained her spurs at WH Smith, transformed under her tenure from a struggling high street group into a fastgrowing chain, focused on airports, motorway service stations, railways and hospitals. Last week, as Swann unveiled robust annual results at SSP, she said she is stepping down next year and handing over to Simon Smith, who runs the group’s UK and Irish business. The shares fell in response, losing almost 10 per cent in three days.

This seems unfair. Smith has worked with Swann for 15 years, initially at WH Smith and latterly at SSP. At WH Smith, he helped mastermind the growth of the travel division. At SSP, he has made the business more efficient and improved profits here and in Ireland.

It is also worth noting how Smiths has fared since Swann’s departure. Having decided to move on when the company was in rude health – much like SSP – she left it in the capable hands of her sidekick, Stephen Clarke. Smiths’ shares have more than trebled under his tenure. Today, Swann will be hoping that Simon Smith can do something similar at SSP, particularly as she is one of the largest shareholders with 4.6 million shares.

MIDAS VERDICT: Investors who bought in 2015 have had a good run and may be tempted to sell or reduce their holdings. Now is not the time, however. SSP has plenty of growth potential, Smith should prove an able successor to Swann and most analysts believe the shares should rise to almost £8 in the next year. New investors may even view last week’s dip as a buying opportunity.