Compass Group FY profits grow despite revenue contraction

Foodservice company Compass Group said on Tuesday that both underlying and statutory operating profits had grown in 2021 despite reporting a reduction in revenues.

Compass stated underlying constant currency operating profits had increased by 55% to £811.0m, while statutory operating profit increased by 85% to £545.0m, reflecting actions taken by the firm to control costs amid lower trading volumes.

Underlying operating margins improved from 2.9% to 4.5%, helping stem some of the impacts of a 5.7% drop in underlying constant currency revenues to £18.13bn and a 10.2% slump in statutory revenues to £17.9bn.

Underlying basic earnings per share were up 72.5% at 29.5p at constant currency, while reported free cash flow surged 341.9% to £464.0m.

Chief executive Dominic Blakemore said: "Our strong financial recovery in 2021, including record new business wins and client retention, is a credit to our teams' exceptional resilience, dedication and expertise in extraordinary circumstances. We are pleased to be reinstating the dividend reflecting our strong cash flow and increasing confidence in the group's performance.

"As we emerge from the pandemic, our strategic focus is on sustained growth for the future, to enhance our competitive advantages and further strengthen our position as an industry leader in food services."

As of 0910 GMT, Compass shares were down 0.75% at 1,461.50p.