The robust US economy is benefiting global catering provider Compass Group (CPG), with the country providing much of its revenue growth in the first half. New business wins and the retention of major contracts with the likes of Intel helped push organic operating profits up 9.6 per cent across North America to £461m. Compass is the 10th largest employer in the US, according to chief executive Richard Cousins, adding that a culture of outsourcing was entrenched in the country. He also said in his 10 years in the industry he had seen a "clear acceleration" in demand for healthy food, to which Compass has responded.
On the flip-side, the 'rest of world' division - its smallest by revenue - suffered largely due to the major pressures being felt in the commodities sector. Mr Cousins noted that the downturn in that industry "seems to be a major correction" rather than a short blip and expected this sector to be "tough for a couple of years". Only 7 per cent of the group's revenues are exposed to commodities, he added. Europe continued its recovery, reporting solid revenue growth, something which could not be said a few years ago.
Analysts at Barclays expect pre-tax profits of £1.31bn in the 2016 financial year leading to EPS of 59.6p, compared with £1.19bn and 53.6p in FY2015.
| COMPASS GROUP (CPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,279p | MARKET VALUE: | £21bn | |
| TOUCH: | 1,279-1,280p | 12-MONTH HIGH: | 1,298p | LOW: 963p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 129p* | NET DEBT: | 136% | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 8.94 | 621 | 27.7 | 9.80 |
| 2016 | 9.54 | 666 | 30.4 | 10.60 |
| % change | +7 | +7 | +10 | +8 |
Ex-div: 23 Jun Payment: 25 Jul *Includes intangible assets of £5.06bn, or 308p a share | ||||
