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Compass delivers ‘strong set’ of half year results

The food and support services business has announced double-digit organic revenue growth across all regions in its half year trading results for the six months ended 31 March 2024.

The group reports a strong underlying operating profit growth of 18.7% on a constant-currency basis, to $1,474m, delivered through a balanced organic revenue growth of 11.2% and underlying operating margin up 50bps year on year to 7.1%. Operating profit increased by 35.8% to $1,420m.

Supporting growth, Compass has invested $693m in capital expenditures (3.3% of underlying revenue) and spent $373m on M&A, including the acquisition of HOFMANNs in Germany and CH&CO in the UK and Ireland which completed in April 2024.

The group is continuing to refine its country portfolio and during the period has exited four countries, these being Argentina, Angola, mainland China and the United Arab Emirates. Compass has also agreed to exit Brazil subject to regulatory approval.

Compass also reports it has completed half of the $500m share buyback announced in November 2023.

Outlook 2024

Strategic priorities looking ahead, says Compass, will be to focus on the company’s core markets and to invest in capital expenditures and strategic in-fill M&A to support future growth through sectorisation and flexible operating models.

Having delivered a strong first-half performance Compass has raised guidance for the full year and expects underlying operating profit growth towards 15% with organic revenue growth towards 10%.

Dominic Blakemore, Group Chief Executive, said: “The Group has delivered a strong set of results, with balanced double-digit organic revenue growth and good underlying operating margin progression across all regions, leading to underlying operating profit growth of 19% on a constant-currency basis.

“Europe is building a strong track record of growth, having benefited from investment and best practice sharing. We have completed the acquisitions of HOFMANNs in Germany and CH&CO in the UK and Ireland, increasing operational flexibility as well as further strengthening our unique sectorised approach to the market.

“Our results are driving strong cash generation which in turn gives us the flexibility to invest capital back in the business through capex and strategic in-fill M&A, to support future growth through sectorisation and flexible operating models, both of which generate excellent returns.

“We have continued to refine our portfolio and increase focus on our core markets where we see significant growth opportunities. The Group has built strong competitive advantages over the past few decades which are being replicated across all our regions.

“As a result of our strong first-half performance and positive outlook, we are raising guidance for underlying operating profit growth to towards 15% for the full year. Beyond 2024, we expect to sustain mid to high single-digit organic revenue growth, ongoing margin progression and profit growth ahead of revenue growth. We will continue to reinvest in the business to support future growth, with any surplus capital returned to shareholders, as we maintain our strong track record of delivering long-term, compounding shareholder returns.”

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