Compass Group (CPG) started life in 1941 as Factory Canteens Limited. While the rather stodgy-sounding name was soon ditched, the catering company is still known for being a solid but bland investment opportunity. As recession looms, however, the group – with its fistful of new contracts, global presence and loyal client base – looks increasingly appetising.
- Record contract wins
- Resilient client mix
- Good free cash flow
- Investing in growth
- Margin pressure
- Office catering in doubt
Compass provides food for offices, schools, hospitals, care homes, gyms and big event venues. It’s no surprise, therefore, that the FTSE 100 company was hamstrung by Covid-19. The damage looks to have been temporary, however: revenue has now overtaken pre-pandemic levels and momentum is building. In the year to 30 September 2022, the group won a record £2.5bn of new business, up from £2.1bn in FY2021 and £1.9bn in FY2019.