There are plenty of signs that catering giant Compass (CPG) is on track for another good year. At the half-way stage, underlying sales, which strip out a negative currency impact, were up 5.7 per cent, while like-for-like sales rose a respectable 2.7 per cent. A bumper six months in North America and high levels of new business boosted margins and helped lift group operating profits by 6.5 per cent to £688m.
Europe and Japan, which Compass counts as one region, are starting to bounce back too: constant-currency revenues nudged up 1 per cent and underlying profits grew 3 per cent to £205m. However, like-for-like volumes in the region are still falling, partly due to the group’s exposure to the depressed oil and gas market in the Nordic states.
Meanwhile, strong levels of new business across emerging markets helped offset a decline in Australia, where Compass provides a full service package for workers on oil platforms and far-flung mines. Revenues across the region rose 6.1 per cent to £1.56bn at constant currencies, though nearly all the growth was wiped out by exchange rates. Operating margins for the region also slipped 10 basis points to 7 per cent, which management blamed on weak volume growth in some emerging markets.
Analysts at Numis expect pre-tax profits of £1.24bn this year, giving EPS of 55.8p, compared with £1.16bn and 48.7p in 2013-14.
| COMPASS (CPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,126p | MARKET VALUE: | £18.7bn | |
| TOUCH: | 1,126-1,127p | 12-MONTH HIGH: | 1,223p | LOW: 925p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 113p* | NET DEBT: | 141% | |
| Half-year to 31 Mar | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 8.6 | 594 | 24.8 | 8.8 |
| 2015 | 8.9 | 621 | 27.7 | 9.8 |
| % change | +4 | +5 | +12 | +11 |
Ex-div: 25 Jun Payment: 27 Jul *Includes intangible assets of £4.71bn, or 284p a share | ||||
