SSP Group expands presence in Australia with acquisition of Airport Retail Enterprises
SSP Group plc, a leading global operator of food and beverage outlets in travel locations, has announced a significant expansion in Australia through the acquisition of Airport Retail Enterprises Pty Ltd (ARE). This strategic move sees SSP acquiring 100% of ARE’s shares, a decision that aligns with SSP’s growth ambitions in the Asia Pacific region and strengthens its operational footprint in Australia.
Airport Retail Enterprises, a prominent privately-owned airport F&B operator since 1971, boasts annualized sales of around AUS$200 million (approximately £100 million) from 62 outlets across seven major Australian airports. These include Sydney, Melbourne, Brisbane, Gold Coast, Canberra, Townsville, and Mount Isa. ARE’s success is attributed to its diverse portfolio of local, national, international, and chef-inspired brands, primarily in-house, positioning it as a leader in the airport dining sector.
The acquisition is perfectly timed with projected growth in international and domestic passenger air traffic in Australia, expected to increase by an average of 10% and 3-4% per annum, respectively, from 2023 to 2030. SSP’s acquisition of Airport Retail Enterprises not only adds high-quality assets and brands to its portfolio but also rebalances its focus towards the burgeoning Asia Pacific Air channel.
Since establishing its presence in Australia in 2007, SSP operates 40 units across seven airports and one train station. The integration of Airport Retail Enterprises’ portfolio allows SSP to enter four new airports, enhancing its coverage to approximately 100 units across 11 of the largest 19 airports in Australia. This expansion is anticipated to be earnings accretive immediately after completion, although the impact on the current financial year will be tempered by initial integration costs.
Patrick Coveney, CEO of SSP Group, expressed enthusiasm about the acquisition, highlighting the benefits of increased brand portfolio, entry into new prime air locations, and significant value creation for shareholders. The acquisition is expected to position SSP as a leading airport F&B operator in Australia, with an opportunity to become a regional center of excellence.
Peter Butts, Founder of Airport Retail Enterprises, reflected on the company’s growth journey and its focus on delivering exceptional dining experiences. He welcomed the acquisition by SSP Group, emphasizing the opportunity for the combined business to offer a wider range of high-quality F&B selections and a continued commitment to excellence in the airport environment.
This acquisition is poised to complete by the end of June, pending regulatory clearance and client consents. With SSP’s strong balance sheet supporting the transaction through existing cash and credit facilities, the acquisition marks a milestone in SSP’s strategy to accelerate growth in the Asia Pacific region, promising enhanced shareholder returns and a stronger position in the global travel F&B sector.