Catering company Compass hiked its full-year dividend on Monday as it posted a rise in underlying operating profit and revenues, and hailed record net new business.
In the year to 30 September, underlying operating profit grew 87.5% to £1.59bn, on revenue of £25.8bn, up 37.5% on the previous year.
The company highlighted “excellent” net new business of 7.5%, while client retention rates improved to a record 96.4%, up 100 basis points on 2021. The dividend per share was lifted 125% to 31.5p.
For 2023, constant currency underlying operating profit growth is expected to be above 20%, with organic revenue growth of around 15%, and an underlying operating margin above 6.5%.
Compass, which has completed an initial £500m share buyback, also announced a further £250m buyback, to be completed in the first half of 2023.
Chief executive Dominic Blakemore 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.”
Blakemore said North America continues to perform strongly, and the company is particularly pleased with its progress in Europe, which is benefiting from an increased focus on growth and retention.
“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.”
