16th Apr 2019 14:51
LONDON (Alliance News) - Moody's Investors Service on Tuesday handed Compass Group PLC a prime-2 rating for its USD2 billion commercial paper programme.
All other ratings for Compass are unchanged, and all have a stable outlook.
Moody's said the rating for Compass, a food services firm, reflects its strong market positions, a diversified mix, strong organic revenue and cash flow growth, limited customer concentration, and "solid" liquidity.
It is also based on, Moody's continued, high shareholder returns, a reliance on North America for profit growth, and cyclical pressures within the commodities market.
"The stable outlook reflects the expectation the company will continue to deliver solid organic revenue growth and stable to growing margins," said Moody's.
"It also reflects Moody's expectation that the company will maintain a consistent financial policy, which will maintain its strong financial metrics at broadly stable levels."
An upwards revision of the rating could come if Compass reduces its net debt to earnings before interest, tax, depreciation, and amortisation ratio below 1.75 times, as well as maintaining organic growth.
On the downside, ratings could change if the net debt/Ebitda ratio rises above 2.5 times for a sustained period or if revenue or profit growth slows.
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