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Summary and Outlook Compass has had a good year. Strong organic revenue growth has been driven by good levels of new business wins across the Group and an improvement in the underlying rate of retention. Ongoing cost efficiencies are driving further improvement in the underlying operating margin and infill acquisitions are making a meaningful contribution to growth. The strong performance in the year is despite the impact of the tragic events in Japan, rising food costs and economic weakness in some of our markets. The fundamentals of the business are working well. Whilst the current economic uncertainty is likely to put ongoing pressure on like for like volume in parts of the business, as we look forward, we remain very positive about the opportunities to grow the business. We are well placed to capitalise on the significant structural growth opportunities in both food and support services around the world and we are encouraged by the pipeline of new business. We see great potential across all our geographies and we are increasing our focus on expanding our presence in the fast growing and emerging economies. We are continuing to drive cost efficiency. This underpins our expectation of further progress in the operating margin over the medium-term. Strong cash flows should continue to enable us both to reward shareholders and invest in value creating infill acquisitions.
http://www.investegate.co.uk/Article.aspx?id=201109290700301482P
http://www.investegate.co.uk/Article.aspx?id=201109020700094914N
Ian Sarson, Group Managing Director of Compass Group UK & Ireland, said: "We are delighted with the acquisition of Cygnet which is a great addition to our education portfolio. At a time when the public sector is coming under increasing budgetary pressures, it will enable us to offer more Local Authorities a proven cost-saving solution at the same time as delivering nutritionally balanced and healthy meals."
COMPASS GROUP ACQUIRES CYGNET FOODS HOLDINGS LIMITED We are pleased to announce today that Compass Group has acquired Cygnet Foods Holdings Limited ("Cygnet") from James Cartwright and Ian Cartwright. For the year ended 31 December 2010 Cygnet had revenues of £9.3 million and gross assets of £2.2m. Cygnet is a specialist provider of school meals to the state education sector, servicing a portfolio of over 450 schools across England. The business delivers both hot and ready to heat meals, prepared in line with the Government's health and wellbeing guidelines, to schools that do not have the necessary catering facilities onsite. The acquisition of Cygnet will further improve Compass' offering to the UK education sector.
http://www.investegate.co.uk/Article.aspx?id=201109020700094914N
Natixis upgrades Compass Group from neutral to buy, target price raised from 570p to 640p
Compass Group Chief Executive Richard Cousins said "Obasan is a great addition to our existing business in Turkey and it will bring significant expertise in providing delivered meals to offices. This will enable us to service more organisations that don't have the required catering facilities on-site and expands our offering to customers in this exciting growth market."
Compass Group Agrees to Acquire Obasan in Turkey Following the acquisition of the remaining 50% of SOFRA, its joint venture in Turkey, in July 2011, Compass Group is pleased to announce that it has agreed to acquire the entire issued share capital of Obasan Gıda İnşaat Sanayi ve Ticaret Anonim Şirketi ("Obasan") from Ömer Faruk Aslanoba, Fatih Aslanoba, Ferruh Aslanoba, Zehra Aslanoba and Emre Aslanoba. Obasan is the leading provider of delivered meals to businesses within Turkey in and around Bursa and Istanbul. For the year ended 31 December 2010, it generated revenues of 89.7 million Turkish Lira (c.£34.8m). The gross assets acquired amount to 24.6 million Turkish Lira (c.£9.6m) as at 31 December 2010. The completion of the transaction is conditional on a number of matters including clearance by the board of the competition authority of the Republic of Turkey.
http://www.investegate.co.uk/Article.aspx?id=201108030700136249L
Compass (CPG) retained its "buy" rating from Seymour Pierce, with a 650p target price after achieving 5.3% organic revenue growth for the nine months ended 30th June, ahead of its closest peer Sodexo, which reported 5.2% growth. The broker adds that in North America the contract catering company grew 6.9%, but that the UK saw a decline of 1.5% in the third quarter. Seymour Pierce notes that the company is trading on a price-to-earnings multiple of 14.7x while French quoted Sodexo is on 18.4 times.
Compass completes Turkish acquisition Date: Wednesday 13 Jul 2011 LONDON (ShareCast) - The world's largest caterer, Compass, has completed the acquisition of the remaining shares in its Turkish joint venture Sofra. In May Compass group announced it had agreed to acquire the remaining 50% of the issued share capital which it did not already own in Sofra subject to the go-ahead from Turkey's anti-trust board. In an anouncement to the London Stock Exchange, Compass confirmed that the necessary clearance has been received and the acquisition of the Istanbul-based food and support-service was complete.
http://www.investegate.co.uk/Article.aspx?id=201107131334043293K
Compass Group Acquires Shing Hin Catering in Hong Kong Compass Group PLC is pleased to announce the acquisition of Shing Hin Catering Group Limited in Hong Kong from Mr Au-Yeung Kwan by its Hong Kong subsidiary Compass Group Hong Kong Limited. Shing Hin Catering generated annual revenues to 31 December 2010 of HK$159.4 million (£12.7 million) and gross assets at that date were HK$17.2 million (£1.4 million). The acquisition strengthens Compass Group's existing foodservices business within the Education and Business & Industry sectors in Hong Kong and will reinforce the platform for further development into the fast growing Chinese market.
http://www.investegate.co.uk/Article.aspx?id=201106230700059429I
There is little to complain about in Compass‘s first-half figures, which indicate that the world’s biggest caterer is moving forward on all fronts. But it is fast approaching a point where it has to take some strategic decisions over the balance sheet. Britain and continental Europe are looking decidedly slow, but both the US and the rest of the world notched up a higher share of group revenues in the first half. The shares, down 4p at 575p, sell on about 15 times’ this year’s earnings. Given the uncertainties, high enough for now, says the Times.
Compass acquires Swedish food service group Date: Tuesday 03 May 2011 LONDON (ShareCast) - Catering giant Compass has added to its overseas operations with the acquisition of a food service business in Sweden. It will pay 16m (£1.6m) SEK for BGP Resurs, which is based in northern Sweden and serves business, industry and leisure sectors. BGP posted revenues of 26.5m SEK in 2010. “The acquisition of BGP provides a valuable platform from which to grow our food service business in the north of Sweden,” said Compass. Compass also reported that it has received clearance for its acquisition of the Dutch food service operations of hospitality and facilities management group Elior. Earlier in the month Compass acquired two catering companies in India, while last month it announced two acquisitions in the US.
http://www.investegate.co.uk/Article.aspx?id=201105030700297478F
Compass gobbles up Indian catering outfits Date: Monday 11 Apr 2011 LONDON (ShareCast) - Catering titan Compass has added to its Indian operations with the acquisition of two catering outfits in the fast growing Asian economy. It has bought Delhi-based Vipul Facility Management (VPM), which has gross assets of 342.2m Indian rupees (£5.2m) and Hyderabad-based Ultimate Hospitality Services (UHS) for 42.1 rupees. “VFM provides an excellent platform to develop our support services capabilities in the region and enables us to offer an extended range of services to clients,” said Compass chief executive Richard Cousins. “UHS further enhances our existing foodservice offering in India and provides a strong foothold in the Hyderabad region.”
Richard Cousins, Compass Group CEO said: "We are delighted with both the acquisition of VFM and UHS. VFM provides an excellent platform to develop our support services capabilities in the region and enables us to offer an extended range of services to clients. UHS further enhances our existing foodservice offering in India and provides a strong foothold in the Hyderabad region".
Compass Group Acquires Vipul Facilities Management and Ultimate Hospitality Services in India We are pleased to announce today the acquisition of Vipul Facility Management Private Limited ("VFM"') and Ultimate Hospitality Services Private Limited ("UHS"). VFM was acquired from Mr Punit Beriwala and family. VFM, located in Delhi, has a national presence specialising in the provision of support services to the Business and Industry sector. The gross assets of the business acquired were INR 374.2m (£5.2m) as at 31 March 2010 with revenue for the 12 months to 31 March 2010 of INR 710.7m (£10m). UHS was acquired from Mr Praveen Rao, Mrs G Anitha and Mr Uppala Kantha Rao. UHS is a strong regional player in the foodservice industry in Hyderabad specialising in the provision of food services to the Business and Industry sector. The gross assets of the business acquired were INR 42.1m (£0.6m) as at 31 March 2010 with revenue for the 12 months to 31 March 2010 of INR 167m (£2.3m).
Compass Group PLC further strengthens its support services capability with the acquisition of PPP-Infrastructure Management Limited Compass Group PLC is pleased to announce the acquisition of UK support services company PPP-Infrastructure Management Limited (PPP-IML) from Semperian (Holdings) Limited, a wholly owned subsidiary of Semperian PPP Investment Partners Group Limited. The annual revenue of PPP-IML was £19.7 million and the Gross Assets at 28 February 2011 were £4.0 million. The acquisition strengthens Compass Group's existing support services offer in the important sectors of Healthcare, Education and Defence.
Global industries are affected by global events – and catering group Compass revealed last week that the earthquake and tsunami in Japan will reduce operating profit by about £5m. However, forecast downgrades are not expected, as growth was relatively strong elsewhere. The shares are trading on a September 2011 earnings multiple of 14.4 and yielding 3.4%. This is at an unwarranted discount to French peer Sodexo, which is trading on a current-year multiple of 17.4 and yielding just 2.8%, claims the Sunday Telegraph. Compass shares were first tipped at 306¼p in the Telegraph on November 30 2008, as a defensive play in turbulent times. The shares are up 84% since then, compared with a FTSE 100 up 39%, but they are still a “buy”, the paper reckons.