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Compass Group PLC on Wednesday backed its annual guidance after reporting higher first-half sales and profit. The Chertsey, England-based contract caterer said pretax profit rose to $1.28 billion in the six months to March 31 from $1.20 billion a year prior, as revenue increased to $22.57 billion from $20.74 billion. Organic revenue growth of 8.5% was driven by strong net new business growth of 4.4%, with pricing at around 3% and like-for-like volume growth of around 1%. Client retention rates remained strong at 96.2%, the firm added. Underlying operating profit rose 12% to $1.63 billion from $1.46 billion with an operating margin of 7.2%, up from 7.1%. Revenue beat Visible Alpha consensus of $22.41 billion, while underlying operating profit topped VA consensus of $1.61 billion. Underlying operating cash flow rose 4.2% to $1.16 billion from $1.11 billion, while free cash flow improved to $743 million from $704 million. Diluted earnings per share improved to 54.1 US cents from 50.4 cents. For financial 2025, Compass continues to expect high single-digit underlying operating profit growth driven by organic revenue growth above 7.5% and ongoing margin progression. In the year to September 2024, Compass reported underlying operating profit of $3.00 billion and an underlying operating profit margin of 7.1%. Longer term, the firm remains confident in sustaining mid-to-high single-digit organic revenue growth, ongoing margin progression and profit growth ahead of revenue growth. Chief Executive Dominic Blakemore said: ‘Although not immune to macroeconomic pressures, we are confident in the resilience of our business model, strength of our value proposition and ability to capitalise on outsourcing opportunities.’ In response, shares in Compass were down 3.1% at 2,525.00 pence each in London on Wednesday morning. The wider FTSE 100 was slightly higher. The interim dividend was boosted by 9.2% to 22.6 cents from 20.7 cents. Compass said its capital allocation framework is clear and unchanged. ‘Our priority is to invest in the business to fund growth opportunities, target a strong investment-grade credit rating with a leverage target of around 1x-1.5x net debt to [earnings before interest, taxes, depreciation and amortisation] and pay an ordinary dividend, with any surplus capital being returned to shareholders,’ the firm said in a statement. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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