9th Feb 2023 09:07
(Alliance News) - Compass Group PLC on Thursday said organic revenue grew in the first quarter as the company reiterated its full-year guidance.
The Chertsey, England-based contract food service company said organic revenue grew by 24% in the first quarter to December 31, compared with revenue growth of 39% in the first quarter of financial 2021.
Compass noted that it continues to benefit from strong outsourcing trends, reporting net new business growth of 5.5% in the first quarter - above its historical rate of about 3%, and in line with financial 2022's net new business growth of 5.7%.
The company said business & industry volumes were strong in the first quarter, as employees return to the office, and in sports & leisure due to high participation rates.
Organic growth was 23% in North America, 26% in Europe and 27% in the rest of the world, the company said, with between 5% and 6% net new business growth in all regions, and double-digit like-for-like volume increases across all regions.
The company added that net expenditure on bolt-on acquisitions was GBP55 million in the first quarter, expanding its brand portfolio and digital and procurement capabilities.
Compass said: "We remain positive for financial 2023 and reiterate our guidance. We expect operating profit growth above 20% on a constant currency basis, organic revenue growth of around 15%, weighted towards the first half of the year, and an underlying operating margin above 6.5%.
"Looking further ahead, we remain excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels and rewarding shareholders with further returns."
The company added that it has completed GBP163 million of the GBP250 million share buyback programme announced in November.
Compass shares were up 0.3% trading at 1,893.00 pence per share on Thursday morning in London.
By Harvey Dorset, Alliance News reporter
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