21st Sep 2021 08:17
(Alliance News) -Â Compass Group PLC on Tuesday said its full-year revenue performance is set to come within reaching distance of pre-pandemic levels after a better-than-expected fourth quarter.
The contract caterer, ahead of the end of its financial year on September 30, said revenue in the fourth quarter is expected to improve to 86% of 2019 levels, which is slightly ahead of previous guidance of 80% to 85%.
For the full-year, the FTSE 100-listed firm said revenue is expected to be 76% of 2019, being pre-pandemic, levels.
Compass said the outperformance was led by its Sports & Leisure unit with improved attendance - particularly outdoor sports - and strong per capita spend. Further, it noted that, since the start of September, the return to Education venues has been strong, with high on-campus spending, while trading in its Business & Industry division was in line with "cautious" expectations.
Compass said its underlying operating margin in the fourth quarter is expected to be around the mid-point of its guidance range of 5.5% to 6.0%, as it continues to manage mobilisation costs and inflation.
For the full-year, underlying operating margin is expected to be 4.4%. This would mark a sharp improvement on the 2.9% posted for the 2020 financial year, but below the 2019 level of 7.4%.
Looking ahead to the start of the new financial year, Compass said most of its sectors are expected to continue performing well. However, it remains cautious about Business & Industry, given continued uncertainty over the pace of office reopening in major markets.
"The group's recovery is unlikely to be linear and will depend on a number of factors including vaccination and infection rates as well as any further containment measures taken by governments," Compass said. "However, we remain confident in our ability to return to a group underlying margin above 7% before we return to pre-Covid volumes."
Shares in Compass were down 0.6% at 1,477.50 pence in London early Tuesday.
By Lucy Heming;Â [email protected]
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