Catering giant Compass (CPG) will return £1bn to shareholders after another strong six months of cash generation prompted a special dividend of 56p a share. Analysts had long speculated on the potential of a payout, especially as the share price climbed to an all-time high.
The one-off payment ups the overall dividend yield to 5.7 per cent and brings the total amount returned to shareholders since 2006 to £6bn. This has partly been through share buybacks. The latest £500m buyback scheme - initiated last November - will now complete in 2015, after a temporary suspension to fund the special dividend.
Compass credited a slew of new business wins in North America and high customer-retention rates for pushing underlying operating profit (which excludes the impact of acquisitions and currency movements) up 6 per cent to £647m. Strip out new business, meanwhile, and like-for-like revenues grew 2 per cent, reflecting modest price increases on flat volumes. Volumes slumped most in Europe and Japan, depressing revenues by 2 per cent to £2.95bn, but this was offset by cost control.
Broker Investec expects pre-tax profits of £1.18bn for the full year, giving EPS of 48.2p, up from 47.5p in 2013.
COMPASS (CPG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,023p | MARKET VALUE: | £18.3bn | |
| TOUCH: | 1,023-1,024p | 12-MONTH HIGH: | 1,039p | LOW: 807p |
| DIVIDEND YIELD: | 2.4%** | PE RATIO: | 41 | |
| NET ASSET VALUE: | 151p* | NET DEBT: | 52% | |
| Half-year to 31 March | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 8.80 | 575 | 23.1 | 8.0 |
| 2014 | 8.66 | 595 | 24.8 | 8.8 |
| % change | -2 | +3 | +7 | +10 |
Ex-div: 21 May Payment: 26 Jun *Includes intangible assets of £4.48bn, or 251p a share **Does not include special dividend worth £1bn in total, or 56p a share | ||||
