Compass boasts higher revenues and profit after ‘strong year’ for catering giant
Bosses described it as a “strong year” for the group which was supported by further growth in North America.
The firm, which provides food service for offices, universities and sports venues, told shareholders that statutory revenues grew by 21.6 per cent to £31bn in the year to September 30, compared with the previous year.
Meanwhile, operating profit rose by 26.1 per cent to £1.89bn despite pressure from inflation.
It told investors it is targeting 13 per cent underlying profit growth in the current financial year, with high single-digit organic revenue growth.
Compass said organic growth over the past year saw a 5 per cent boost from new business, while it was pushed 7 per cent higher by higher pricing while like-for-like volumes also grew 7 per cent.
Dominic Blakemore, Compass Group chief executive, said: “2023 was a strong year for Compass.
“North America continued its long track record of excellent growth whilst Europe delivered a second year of net new growth in the 4-5 per cent range.
“During the year, we continued to successfully capitalise on the dynamic outsourcing trends, resulting in another record year of new business wins and continued strong client retention.
“The business is in great shape operationally and financially and well positioned for a more focused growth phase.”
In a statement to accompany the results, Mr Blakemore added: “Performance this year has been pleasing across our key metrics of revenue, profit and cash. Favourable market conditions, persistent inflation and our flexible operating model continued to support strong balanced net new business growth across all our regions, with first-time outsourcing accounting for circa 50 per cent of new wins.
“Our large addressable market has a long structural runway for growth and, with increasing complexity and heightened expectations from clients and consumers, we expect to sustain growth higher than our historical average.
"We have clear strategic priorities to capture these exciting opportunities by focusing on our core markets and evolving our operating model.
“Strong profit growth and cash generation underpin our robust balance sheet giving us options for capital allocation. The total dividend for the year of 43.1p is complemented by a share buyback of up to $500m (£410m), subject to M&A (merger and acquisition) activity, in line with our recent returns to shareholders. Looking further ahead, we remain excited about the significant global structural growth opportunities, leading to revenue and profit growth above historical rates.”
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Compass Group has served up a set of full year results that is likely to satisfy shareholders’ tastes.
“Volume and price contributed to growth in equal measure, and encouragingly new business growth of 5 per cent trended above historical norms.”