Shareholders in Compass (CPG) can look forward to a £1bn special dividend, or 61p a share, thanks to a sterling first half, where pre-tax profit was up by a quarter (see table). North America continued to be the commercial catering provider's strongest market, accounting for 59 per cent of revenue, including catering for Twitter, Google and LinkedIn. Its European business contributed 26 per cent towards the top line, but this could improve further as the group has signed new contracts with Premier league teams Tottenham Hotspur and Aston Villa, on top of existing deals with Chelsea, Leicester City, and Swansea City.
The first phase of the cost savings plan, which saw restructuring in the emerging markets and offshore divisions last year, gave the operating margin a 20 basis point boost. The next phase will focus on the cost of food, with menu planning and supplier rationalisation, and working to reduce labour costs. Management said that these efforts in conjunction with price increases helped to offset inflationary pressures and allowed for reinvestment during the period.
Analysts at Panmure Gordon & Co expect pre-tax profit of £1.6bn in the year to September 2017 with EPS of 73.4p, compared with £1.3bn and 61p in FY2016.
| COMPASS (CPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,601p | MARKET VALUE: | £26.3bn | |
| TOUCH: | 1,601-1,602p | 12-MONTH HIGH: | 1,639p | LOW: 1,242p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 170p* | NET DEBT: | 102% | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2016 | 9.5 | 666 | 30.4 | 10.6 |
| 2017 | 11.5 | 831 | 37.5 | 11.2 |
| % change | +20 | +25 | +23 | +6 |
Ex-div: 18 May Payment: 19 Jun *Includes intangible assets of £5.7bn, or 203p a share | ||||
