Compass Group lifts FY guidance after strong first half

In the six months to the end of March, underlying operating profit rose 41.1% to £1.05bn and revenue was up 24.7% to £15.8bn. The operating margin improved by 80 basis points to 6.6% and earnings per share rose to 42.7p from 29.9p.

The interim dividend per share was lifted by 59.6% to 15p. Compass hailed "balanced" growth across all regions and "excellent" net new business of 5.2%.

It lifted its full-year guidance for operating profit growth to "towards" 30%, from "above" 20%, and for organic revenue growth to around 18% from around 15%. It expects the operating margin to be between 6.7% and 6.8%, up from previous guidance of 6.5%.

Compass also announced a further share buyback of up to £750m in 2023, taking the total programme announced since May 2022 to £1.5bn.

Chief executive Dominic Blakemore said: "Net new business continued to be excellent, and significantly higher than our historical rate. We are particularly pleased with the step change in our Europe performance which has benefited from growth initiatives as well as favourable outsourcing conditions.

"Despite pockets of macroeconomic weakness, the outsourcing market remains very attractive. We believe that many of the complexities that drive outsourcing, such as increased regulation, changing client and consumer expectations, and inflation, are here to stay. With our strong cash generation, we continue to invest in our business and evolve our operating model, further enhancing our scale and competitive advantage."