On Wednesday, food caterer Compass Group (CPG.L) boosted its fiscal 2023 expectations after half-year earnings rose 41%, helped by more people returning to work and events and higher food inflation.
Due to first-time outsourcers going to major caterers, the world’s largest catering firm has grown. Still, its profits have trailed pre-pandemic levels due to higher food, labor, and new business expenditures.
“I think what’s really important to us is we continue to see margin progression, that we continue to grow above historic levels, and in the face of significant inflation, we continue to be fair and balanced in pricing with our clients,” CEO Dominic Blakemore told Reuters by phone.
The firm, which owns various food service brands serving workplaces, colleges, and sports stadiums in 40 countries, boosted its operating profit growth target to 30% on a constant-currency basis for the year ending September 2023 from over 20%.
It expects organic sales growth of 18%, ahead of market estimates, and an underlying operating margin of 6.7% to 6.8%.
A company-compiled consensus forecast 6.7% margins this year and 7% pre-pandemic in fiscal 2024.
Morning shares jumped 2%.
Blakemore said Compass’s biggest potential and challenge is to continue its rapid growth and quality in an attractive outsourced market.
Blakemore said Compass would not list in the US after reporting in US dollars from October to prevent foreign exchange translation volatility on results.
Compass also announced a 750 million-pound ($946.58 million) share purchase and a 60% increase in interim dividends.
For the six months to March 31, its underlying operating profit was 1.05 billion pounds ($1.33 billion), up from 744 million a year earlier.
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