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Compass Group’s revenues exceed 2019 levels

Compass Group’s Full Year results for the year ended 30 September 2022 showed the food and support services provider has achieved the significant milestone of global revenues exceeding their 2019 levels, with all sectors and regions now trading above their pre-pandemic highs.

For the full year, underlying global revenue increased 37.5% to £25.8 billion. In Q4 2022, the Group was at 116% of 2019 revenues. Underlying operating profits rose 87.5% to £1.6 billion.

The Group reports that all sectors and regions traded above pre-pandemic levels during the second half of 2022, with Business & Industry seeing a notable improvement as employees returned to work, exiting the year at 106% of its pre-pandemic level. Education and Sports & Leisure also performed particularly well, increasing to 117% and 125% of 2019 revenues, respectively, in the fourth quarter.

The group also reported new business wins increased to £2.5 billion, with strong contributions from North America and Europe. Client retention rate was up by 100bps year-on-year to a new record of 96.4%, and first-time outsourcing market remains buoyant, accounting for c.45% of new business wins.

Dominic Blakemore, Group Chief Executive, said: “The Group’s performance surpassed our expectations both in terms of net new business growth and base volume recovery, with Business & Industry now operating above its pre-pandemic revenues. The strong growth trends seen in the first half have continued, with net new business accelerating through the year in all our regions. Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalising on the resulting growth opportunities.

“North America continues to perform strongly, and we are particularly pleased with our progress in Europe, which is benefiting from an increased focus on growth and retention, supported by investments in our people, brands, and processes.

“Thanks to the hard work of our teams across the world, Compass has emerged from the pandemic as a stronger and more resilient business, reflecting our clear strategy and market-leading growth enablers. While the macroeconomic environment is uncertain, we are working in partnership with our clients to mitigate inflationary pressures and supporting our colleagues during this challenging period by offering financial support and other benefits.

“For 2023, we expect underlying operating profit growth to be above 20% on a constant-currency basis, to be delivered through organic revenue growth of around 15%, weighted towards the first half of the year, and underlying operating margin above 6.5%. Having completed the previously announced share buyback of £500m, we have announced a further share buyback of up to £250m, taking the total to £750m.

“Looking further ahead, we remain excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels and rewarding shareholders with further returns.”

Webinar: How to control the flow of people and parcels through your facility – 23 November at 11am

According to Pitney Bowes Parcel Shipping Index, worldwide parcel volume is likely to double in the next five years, with the UK showing the highest increase in carrier revenue of all 13 countries in the Index.

Alongside a huge uptake in the volume of parcel volume and spend, post pandemic, the adoption of hybrid working patterns means that FMs need to find ways to enable staff to book / host collaborative meetings in available workspaces and to find desk, office and parking spaces by utilising automation and data capture to enable site governance.

Yet a recent survey by FMJ in partnership with Pitney Bowes found that 20 per cent of recipients are still using manual paper-based visitor systems, which doesn’t fit with their top priority – to maintain a safe and operational environment.

This overwhelming reliance on paper-based systems is causing many respondents bottlenecks, resulting in a lack of efficiently in logging and tracking packages and people coming into the organisation.

In this webinar, Gary Abbott Director of Business Development and Stuart Bushaway, Head of Dealers Operations and FM Relationships at Pitney Bowes will outline the main findings of the two surveys and what this could mean for FMs.  This will be followed by a discussion, chaired by FMJ Editor Sara Bean comprising Wayne Young – Facilities Manager, Just Eat Takeaway.com & Simi Gandhi-Whitaker, Strategic Technology Director, Connected Workspace, Mitie.

Register for the webinar here.

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