Compass beats Q4 guidance as sports and leisure thrive

Compass said fourth-quarter performance was ahead of guidance as diners returned to sports and leisure venues and schools and colleges reopened.

Revenue in the three months to the end of September is expected to be about 86% of the same period in 2019 and annual revenue will be about 76% of that year's, the FTSE 100 caterer said. Compass had previously said fourth-quarter revenue would be 80-85% of the 2019 level.

Compass said its performance was led by improved attendance and strong spending per head at sports and leisure sites. Since the start of September the return to education has been strong with high spending on campus.

Healthcare and defence, offshore and remote sectors continued to trade ahead of 2019. Business and industry was in line with cautious expectations and Compass said there was continued uncertainty about the pace of office reopening in major markets.

At current foreign exchange rates, annual revenue will be reduced by about £943m and operating profit will be £29m lower, Compass said.

The company said its underlying profit margin in the fourth quarter would be around the middle of guidance for 5.5% to 6%. Full-year margin will be about 4.4% and the measure is set to return to 7% before volumes get back to pre-pandemic levels, Compass said.

"We continue to be encouraged by the ongoing growth opportunities including strong momentum in new business wins, from the acceleration in first-time outsourcing, and increased potential for market share gains," Compass said.