20th Nov 2023 10:29
(Alliance News) - Compass Group PLC on Monday increased its final dividend as revenue and profit surged, and announced a new USD500 million buyback.
Despite the strong financial results, Compass shares were down 4.9% at 1,989.50 pence on Monday morning in London.
The Chertsey, England-based catering and food service provider said revenue for the year that ended September 30 increased 22% to GBP31.03 billion from GBP25.51 billion the previous year. Pretax profit increased 19% to GBP1.75 billion from GBP1.47 billion.
Compass said North America delivered the strongest performance, with revenue up 23% at GBP21.09 billion. Europe revenue increased 19% to GBP7.04 billion, and Rest of World revenue rose 17% to 3.15 billion.
Basic earnings per share, Compass added, rose 20% to 75.4 pence from 62.6p.
The FTSE 100 company declared a final dividend of 28.1p per share for financial 2023, up from 22.1p. This brought the year's total dividend to 43.1p from GBP31.5p.
Compass also announced a new buyback to redistribute up to USD500 million among its shareholders. This is scheduled for the current financial year, subject to Mergers & Acquisitions activity. The firm said one of its current strategic priorities is investing in future sources of growth, through both M&A and capital expenditure, "enhance our capability and expertise".
"2023 was a strong year for Compass," commented Chief Executive Officer Dominic Blakemore. "North America continued its long track record of excellent growth whilst Europe delivered a second year of net new growth in the 4-5% range.
"During the year, we continued to successfully capitalise on the dynamic outsourcing trends, resulting in another record year of new business wins and continued strong client retention."
For the current year, Compass expects underlying operating profit to grow by around 13% thanks to "ongoing margin progression" and high single-digit growth in organic revenue.
"The business is in great shape operationally and financially and well positioned for a more focused growth phase," Blakemore said.
By Emma Curzon, Alliance News reporter
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