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Compass Group PLC on Tuesday raised guidance as it announced the expansion of its European business with the €1.5 billion acquisition of Vermaat Groep BV. In response, shares in the Chertsey, England-based contract caterer rose 3.8% to 2,621.00 pence each in London on Tuesday morning. The wider FTSE 100 index was slightly higher. Compass said the acquisition of Vermaat, a premium food services business in Europe, is expected to be margin and earnings per share accretive in the first full year of ownership. Established in 1978 in Utrecht, the Netherlands, Vermaat serves over 200,000 guests daily across 700 plus locations. It is a ‘market leader’ in the Netherlands, Compass said, with a growing presence in Germany and France, all of which are among the UK company’s top ten markets. Vermaat is on track to generate sales of around €700 million with a double-digit operating margin in 2025. ‘The strategic acquisition, combined with synergy benefits, is expected to achieve returns ahead of the group’s cost of capital in the medium term, given the high-quality nature of the business, its strong growth profile and ability to create long-term shareholder value,’ Compass said in a statement. Following completion, Compass anticipates its post-acquisition leverage to be around 1.5 times net debt to earnings before interest, tax, depreciation and amortisation at the end of financial 2026, before deleveraging in financial 2027. In addition, Compass reported organic revenue of 8.6% in the three months to June 30, the financial third quarter, and 8.5% for the financial year to date. Both regions performed well, with North America delivering organic revenue growth of 9.6% and International 6.6% in the quarter, and 9.0% and 7.6% year-to-date. Net new business growth continued in the middle of the firm’s 4% to 5% target range, supported by strong client retention of over 96%, Compass added. ‘Volume growth in both regions remained positive, with North America particularly strong as it benefited from favourable hospitality events. Growth in International was slightly lower compared to Q2, due to mobilisation timings. Pricing was in line with our expectations,’ the company said. As a result, Compass raised 2025 guidance. ‘We now expect constant currency underlying operating profit growth to be towards 11%, driven by organic revenue growth above 8% and ongoing margin progression,’ the firm said. In the financial year that ended September 30, 2024, Compass reported underlying operating profit of $3.00 billion, up 16% from $2.58 billion year-on-year. But Compass added, if current spot rates remain as they are, foreign exchange translation will reduce financial year revenue by $57 million and operating profit by $13 million. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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