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(Alliance News) - Compass Group PLC on Wednesday lifted annual guidance and the contract caterer upped its dividend and announced a share buyback.
The Chertsey, Surrey-based firm said pretax profit in the six months to March grew 31% on-year to GBP831 million from GBP632 million, on the back of a 36% revenue rise to GBP15.69 billion from GBP11.50 billion.
"Despite some pockets of macroeconomic weakness, the food service market is large and very attractive with a long structural runway of potential. Increasing operating complexities and evolving client and consumer requirements are driving exciting growth opportunities which we believe are mostly structural. Our strategic priorities are focused on capitalising on these opportunities and driving accelerated financial performance," the company said.
Further, it cited structural growth opportunity from first-time outsourcing, noting that about half of the market is self-operated.
"As the operating environment becomes increasingly challenging due to a combination of inflationary pressures, increased client demands and other additional complexities, we have a clear strategy to capture the acceleration in first-time outsourcing based on our focus, scale and expertise," the firm explained.
Compass declared an interim dividend of 15.0 pence per share, up 60% year-on-year from 9.4p. Further, it announced a share buyback of up to GBP750 million, which it plans to complete during 2023.
Looking ahead, Compass upped its full-year guidance. It now expects operating profit growth towards 30%, from above 20% previously, and organic revenue growth of about 18%, up from about 15% previously.
"The group performed strongly in the first half of the year, benefiting from balanced growth across all regions. Net new business continued to be excellent, and significantly higher than our historical rate," said Chief Executive Officer Dominic Blakemore.
The company anticipates "significant global structural growth opportunities,leading to revenue and profit growth above historical rates."
Compass shares rose 1.8% to 2,102.00 pence each on Wednesday morning in London.
By Tom Budszus, Alliance News reporter
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