According to BB's, FTSE 100 - Compass Group, the group which took a tumbling in it's share price from 3.85p, may be the target of a takeover, though I read before sometime ago, this time, the time could be ripe.

Definately worth watching in the short and medium term.

Good Luck to all if it comes true.

Jules99

d.d. as a holder could i ask why you think the potential is still there?

Haydn44,am i right in thinking that cpg is still the largest in its sector, with a very small % of the market share . There seems a long way to go with the cash machine deal,there must be a profit in there somewhere,,after all they have a captive audience on the motorway,and with more and more bank machines going the way of charging,that could become the norm.I belive there`s a glint of light over in the states as well,and not to forget the contracts over here .Its well off on the charts,and if a bid comes in,its at the right end price wise to interest people just my view as your a holder whats yours,,can you shed any light on the compass..

dave.

Is this the catering company trading @ 250p?

Yes opto.

Dave: Compass Group being the largest global food service company, operating in over 90 countries are well poised, after the profit warning of last September, to benifit from the changes made. The price can only go north the question is in what time?

They contiue to gain market share in the US where they are now leader with a 5% market share (plenty of room for growth there) they also have a clear strategy for long term growth achieved organically and through aquisitions. Compass had a strong growth record until it carried out a complicated merger and demerger with Granada which left it with some business to dispose of, it also spent a futher 1.3M on aquisitions particularly in the US. They will now cut back on these aquisitions and will only spend about 200M annually on in fill aquisitions.

Compass have also identified China as its principal driver of growth. They have made a start with currently 120 customers in China with good sales growth of about 20% a year, these include BMW, General Motors and Peugeot (turnover in China is 30M against 3.5 billion in the USA which illustrates the potential). As an old China hand i can only assume that they have learned to cook boiled rice in industrial quantities.

They also have deal with Marks & Spencer Simply Food outlets at its motorway service stations and intend to roll out Simply Food in more of its 47 motorway areas over the next few years.

Following last Septembers profit warning, due in part to supporting Peters Foods, one of the companies suppliers, and also educational contracts which were badly priced by Compass with a lower then expected throughput putting pressure on margins (UK margins are expected to fall to the 9.5% level). In store resturants have also been a problem as input costs are incurred at the begining of a contract, these costs will exist for the next three years. They are also a company hit by pension costs and will have to raise their input for pension costs next year by 15M. Cash outflow has also been a problem, 100M capital outflow was required to service a UN contract in the middle east as they had to raise inventories to avoid too frequent deliveries, another 100M outflow comes from the relaxed terms of payment to suppliers which came from
payment in 90 days down to sixty days to comply with European directives. These problems are one off, are unlikely to be repeated and are not rocket science to fix. I beleive they will come good even without a bid, strong management is required though to manage thier diverse reources. This has not been evident in the recent past as the foregoing illustrates.

Fundementals remain strong with analysts expectations of a pretax profit of around 701M in the current financial year and a 3.76% dividend yield.

Barclays Stockbrokers, as befits being part of a charging bank, recommend that Compass be treated as a source of funds. In other words cash in your chips and spend the money on something else. This opinion differs to other brokers on the same web site who give it as a strong buy, buy or are neutral. The overwhelming opinion is positive, which i think the preceeding also indicates if you have the time to wait.
Regards,
Haydn.

For a business which turned over 11Bn in its last year, operating profits of around 770M not that great - could pose an opportunity or a threat. Intangibles (where values debateable) are half of total assets and debt uncomfortable approaching 2.4BN.Competition increasing and businesses spread all over the place - needs first class management. IMO it would be a brave or foolish act to launch takeover and the shares are risky. Some parallels with RTL a few years ago and they are still trying to recover.DYOR

Haydn44,seems to me that there is room for improvement in a few areas,,not just the sp.

Would agree, UK margins fall to 9.5% is of particular concern and the dividend, though acceptable, is not covered. For holders like myself probably the best course is to continue holding for others it is best avoided.

Still looking at this one and its drawing me in i feel,share price wise i dont think it will get much lower than this.

The share price probably can't go any lower and with a like for like turnover growth of 7% last year (though only 5% in the UK)the potential is still there.
New bisiness secured last year totaled 1.2 billion, all that remains now is the ability to manage it to be demonstrated.

230,and i will be in .

Bought at 234 happy with that..

We have movement today & its upwards!!!!

dd nice turnaround bodes well for the rest of week

Early days woodie.

Fancy a ready made meal!

More bait being taken today!

Just checked on the site and it looks as if it wont go Ex-Div
for another fortnight - can anyone confirm the ex-div or record dates?

Bunny i think mid feb to be on ,mid march for the pay out.

16th Feb

6.2p

cheers