Compass' ratings affirmed by Fitch

Food-services company Compass' long-term issuer default rating and senior-unsecured rating of ‘A-‘ have been affirmed by Fitch Ratings, which cited its steady demonstrated operating performance.

Fitch said Compass’s outlook was stable.

The credit-ratings firm further noted Compass’ diverse customer base, strong geographic diversification, high-retention rates and proven ability to deliver efficiencies and cost savings.

“Compass' cash-generative business model and its strong financial flexibility also support the rating,” it said, noting an expectation for steady organic revenue growth to drive expected revenues of about £20bn by FY 2018.

Fitch added that Compass’ rating was constrained by shareholder-friendly returns, which reduced deleveraging prospects.

“However, this is balanced by management's stated commitment of maintaining a leverage ratio (net debt/EBITDA) of around of 1.5-times,” said Fitch in a statement.

“Other constraining factors are weakness in some of its commodity-related more cyclical businesses and some emerging countries, although this is offset by growth in other parts within the group.”

Fitch Ratings expected Compass’ dividends to steadily rise each year, along with annual share buy-backs of £275m–£375m.