RE: Full Year Results20 Nov 2023 10:33
It was worth the time to listen in. Input inflation is moderating across their markets with wage growth slightly ahead of food price growth and they have been able to push up their prices to compensate. Dominic (CFO) said that talent retention was a key component to future growth in a market where they can still gain market share. They are focusing in on core markets and have let some peripheral ones go. Growth next year to be broadly, equally spread between first and second half. Some of the analysts seemed to think that next year's profit growth of "13%" to be rather cautious, of course they had to confirm their figure, but it transpires that it does not assume volume growth from existing customers and yet we know people are coming back to their offices more hours a week and therefore in house catering contract will see some volume increase. And Garry Green said, "Yes, there might be."
Cash conversion continues strong and even with the share buy-back, further dividend growth and bolt on acquisitions they will be at the lower end of their target gearing. In future years accounting will be in US$ rather than sterling reflecting the dominance of the the US. Palmer Brown is retiring. Conclusion: despite the fall on the results the shares are in my view a "firm hold" (They had a bit of a run ahead of the figures.) I think they have set themselves a beatable profit growth target for the y/e 24 and an acceptable one if they don't beat it.