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Upper Crust-owner SSP Group's shares fall after earnings disappoint

By Echha Jain

(Reuters) -Shares in Upper Crust owner SSP Group fell as much as 9% on Tuesday after the airport food chain operator reported first half core earnings that were below analysts' forecast.

Core earnings for the half-year came in at 106 million pounds ($134.81 million), up from last year's 91 million pounds but slightly lower than analysts' average estimate of 107 million pounds, according to a company-compiled consensus.

Shares of SSP, which also owns the Ritazza coffee shop chain, fell at one point to a six-month low of 190 pence apiece.

By 1314 GMT the shares, which had already fallen 11% this year by Monday's close, were down 6.8% at 194.71 pence.

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However, the firm said it expects demand for travel to remain resilient and reiterated its expectations for 2024.

"Trading momentum has continued into the second half, and we are confident in delivering on our expectations for the full year," CEO Patrick Coveney said.

Sales at restaurants and stores in transit locations improved, with the company reporting like-for-like sales growth of 12% during the half-year period, as business and leisure travel grew over the last year.

SSP also anticipates a summer of strong demand across its markets, including Europe which is set to host sporting events like the Olympic Games and the Euro football championship this year, which would help boost footfall in transit locations.

Coveney also said statutory profit before tax fell 19% in the six months ending March 31 due to higher depreciation costs for some assets and as the group spent more on M&A activities.

SSP's recent M&A activity included buying an Australian airport food and beverage operator and a merger in Indonesia.

Total revenue on a constant currency basis for the first six weeks of the fiscal second half was up 14%, SSP said.

($1 = 0.7863 pounds)

(Reporting by Echha Jain in Bengaluru; Editing by Rashmi Aich and Susan Fenton)