Compass: Return to office and university helps catering giant to double-digit growth
Catering company Compass has reported double digit growth in the third quarter of 2024 as it looks to expand past North America and the UK.
Revenue in Europe led with 12 per cent growth, while in North America it grew by 9.9 per cent and in the rest of the world grew by 8.5 per cent.
The firm, which provides catering services for universities and offices, said it was on track to deliver profit growth of over 15 per cent on a constant-currency basis, with revenue growth of over 10 per cent.
The company has benefited from the post-pandemic return to offices and the return of in-person university education after it was plagued by a lull due to restrictions.
Potential currency headwinds could also negatively impact revenue by $106m (£82m) and operating profit by $17m (£13.2m), the company said. The hospitality group reported operating profit of $1.4bn (£1.1bn) in the half year.
The group—which also catered for the London Olympics—reported an “exciting pipeline of new business opportunities” and said it was “pleased” with the results.
“We are continuing to invest in our portfolio, as we replicate our North America blueprint elsewhere, to support our existing capabilities, increase operational flexibility and further strengthen our unique sectorised approach to the market”, the company said.
Earlier this year, Compass announced plans for a multi-million-pound takeover of competitor CH&Co, the go-to hospitality provider for Kew Gardens and the Royal Opera House.
The catering giant then raised their guidance following contracts with both venues.
Its net expenditure on mergers and acquisitions, including the deal for CH&CO, was $836m (£647m) for the year to date. The company also disposed of their Brazilian business in May 2024.
“We continue to believe that Compass can grow stronger for longer versus historic trends,” analysts at Shore Capital said, adding that their current earnings-per-share estimates could prove “conservative” given “scope for continued upgrades and building excess capital on the balance sheet”.
As of July 19, the group had completed $300m (£232m) of its $500m (£387m) share buyback programme, which was announced in November 2023, with the remainder “to be completed before the end of the calendar year”, the company said.
The firm’s share price has risen by 2.52 per cent in the year to date and over three per cent in the last full year.