3rd Feb 2022 08:53
(Alliance News) - Compass Group PLC on Thursday reported a faster rate of organic revenue growth in the first quarter of its financial year, with revenue nearly returning to pre-Covid levels on new business and client retention.
Shares in the Surrey-based contract caterer were 7.6% higher at 1,779.00 pence each on Thursday morning in London, the best performer in the FTSE 100 index.
For the three months ended December 31, organic revenue grew 39% year-on-year, marking an improvement from the 33% revenue rise in the fourth quarter of the 2021 financial year.
Revenue for the period returned to 97% of pre-Covid levels, which Compass attributed to new business, recovery in its base business and a limited impact from the emergence of the Omicron variant.
The group noted strong growth from all of its regions, with North America revenue alone slightly topping levels seen in 2019.
However, Compass warned on currency effects, noting that if the average exchange rates seen in the period continued for the rest of the financial year, the foreign exchange translation will hurt revenue by GBP75 million and operating profit by GBP3 million.
Looking ahead, Compass said it remains mindful of Omicron in the second quarter, with Business & Industry clients delaying their return to work, and some Sports & Leisure events being postponed.
However, the outlook for the year ending September 30, with organic revenue growth expected between 20% and 25%, and the underlying operating margin expected over 6%.
Compass will publish its interim results on May 11.
By Dayo Laniyan; [email protected]
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