Catering giant Compass restarts dividend payouts as easing restrictions give profits a lift
Catering giant Compass said this morning that, despite labour shortages and rising costs, it has restarted shareholder dividend payouts as annual profits jumped higher thanks to easing pandemic restrictions.
The world’s biggest caterer saw pre-tax profits more than double to £464m in the year to September 30 from £210m the previous year.
Results were bolstered by cost-cutting action to weather the Covid-19 crisis, while revenues also recovered to 88% of pre-pandemic levels by the fourth quarter as economies reopened.
Over the full year, revenues fell 10.2 per cent on a statutory basis to £17.9bn, or down 6.3 per cent on an underlying basis.
The group, which had put its dividends on hold in April last year when the pandemic struck, resumed payouts with an annual divi of 14p a share as it hailed record new business wins of around £2.1bn.
Food catering demand has bounced back as universities and schools have reopened for face-to-face teaching, while workers have also returned to offices and events are back on once more.
The group said it was also seeing more new business as firms outsource their catering needs for the first time in an attempt to cut costs.
But while the group painted a picture of ongoing recovery, it also cautioned over the near-time pressures of inflation and worker shortages.
It said progress on margins would likely be weighted towards the second half of 2021-22 as it faces surging cost pressures.
Shares dipped more than 1 per cent despite the divi cheer.
Compass said: “There is still some uncertainty in the macroeconomic environment, particularly as it relates to labour shortages, inflation and the pandemic, which we expect to continue to impact our business in the nearer term.
“That said, the new business pipeline continues to be strong and we remain very confident in the long term growth potential of the group supported by exciting significant structural market opportunities globally.”