Revenue and earnings up at Compass

Underlying revenue grew 5.8% at foodservice and support firm Compass Group in its first half, it reported on Wednesday, with the figure totalling £9.7bn in the six months to 31 March.

The FTSE 100 firm posted two profit figures - one before, and one after the restructuring which was announced last July.

Compass said its operating profit before restructuring grew 6.4% to £735m, with an operating margin of 7.5%.

After restructuring, operating profit grew 4.8% to £724m, with an operating margin of 7.4%.

The company’s earnings per share grew 8.1% over a year earlier, to 30.8p, while its free cash flow improved 22.6% to £396m.

"Compass has had another strong six months. North America continues to deliver excellent growth,” said group chief executive Richard Cousins.

“Our business in Europe is growing nicely as we are rewarded for our investment in previous years to accelerate growth in the region.”

Cousins said that in the Rest of World division, there was reasonable growth in business and industry, healthcare and seniors, education, and sport and leisure, though that was partly offset by ongoing weakness in Australia, Brazil and its Offshore and Remote arm.

“We continue to drive operating efficiencies around the business, which is being reinvested in the growth opportunities we see,” Cousins explained.

“The savings from the restructuring are starting to come through, and are offsetting the weakness in Offshore and Remote and some emerging markets. Therefore, margins pre-restructuring were flat.”

The board’s expectations for the financial year remained positive and unchanged, it confirmed, with Cousins saying the company’s pipeline of new contracts was encouraging.

He said the firm’s focus on organic growth, efficiencies and cash gave the board and management confidence in achieving another year of delivery.

“In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue growth, margin improvement, as well as continued returns to shareholders through dividends and ongoing share buybacks,” he explained.

Compass’s board announced an interim dividend per share of 10.6p, up 8.2%.