Compass scores ‘strong start’ on back of double-digit revenue growth

Compass Group hailed a ‘strong start’ to the financial year after posting double-digit percentage growth across all regions.

The world’s biggest catering business reported organic revenue increased by 11.7 per cent in the three months ending December.

Sales grew the most in Europe, where they rose by 13 per cent, while they expanded by 11.3 per cent in North America and 11.8 per cent across the rest of the world.

Healthy growth: Compass Group, the world’s biggest catering business, reported organic revenue increased by 11.7 per cent in the three months ending December

Compass noted like-for-like volumes were ‘better than anticipated,’ particularly in its business and industry division, which specialises in workplace catering and whose clients include Porsche and Heathrow Airport.

Since pandemic-related restrictions started loosening, the segment has rebounded significantly as employers have encouraged staff to return to their offices.

The Surrey-based firm’s trading update comes about a fortnight after it agreed to buy CH&CO for £475million to help broaden its domestic operations.

CH&CO provides services to a vast array of sectors, but its customers comprise some of Britain’s most famous cultural institutions, such as Kew Gardens, the Royal Opera House and Abbey Road Studios.

Like other caterers, Compass has bolstered the volume of takeovers in its largest territories while reducing its presence in non-core markets like China, Argentina and Angola.

During the first quarter, the FTSE 100 company’s net acquisition spending totalled $352million, with the majority of this spending related to the purchase of German cooked and frozen meals supplier Hofmann’s.

Dominic Blakemore, chief executive of Compass, remarked: ‘We’ve had a strong start to the year with sustained balanced growth across all regions.

‘Outsourcing trends and volumes were strong despite continued inflationary pressures and some macroeconomic uncertainty.

‘The group’s good cash generation and balance sheet gives us the flexibility to invest in capex, driving organic growth, and acquire high-quality businesses, unlocking further growth and enhancing shareholder returns.’

Compass further declared it had completed around $100million of its $500million share buyback programme, which the company announced last November when publishing its annual results.

Last year, the firm’s revenue expanded by 21.6 per cent to £31billion, while profits jumped by over a quarter to £1.9billion following price and volume growth, and a boost in new clients outsourcing their catering services. 

Compass Group shares were 3 per cent higher at £22.13 on late Thursday morning and have risen by approximately 18 per cent over the past 12 months.

This post first appeared on Dailymail.co.uk