Global catering giant Compass has revealed that its profits almost tripled in the past year in a recovery that has “surpassed expectations”, following severe business disruptions during the height of the Covid-19 pandemic.
In its recently published financial results for the year ending 30 September, the company reported statutory pre-tax profits of £1.5 billion, up from £545 million in the previous year, with revenues rising by 42.5%, reaching £25.5bn for the year.
The group said it expects operating profits to rise by about 20% in the next year, intended to be delivered through organic revenue growth of around 15%, weighted towards the first half of the year.
Dominic Blakemore, group chief executive at Compass, said: “The group’s performance surpassed our expectations both in terms of net new business growth and base volume recovery, with business and industry now operating above its pre-pandemic revenues.
“The strong growth trends seen in the first half have continued, with net new business accelerating through the year in all our regions. Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalising on the resulting growth opportunities. North America continues to perform strongly, and we are particularly pleased with our progress in Europe, which is benefiting from an increased focus on growth and retention, supported by investments in our people, brands, and processes.
“Thanks to the hard work of our teams across the world, Compass has emerged from the pandemic as a stronger and more resilient business, reflecting our clear strategy and market-leading growth enablers. While the macroeconomic environment is uncertain, we are working in partnership with our clients to mitigate inflationary pressures and supporting our colleagues during this challenging period by offering financial support and other benefits.”
In the final quarter of the year, the group was at 116% of 2019 revenues, with business and industry operating at 106% of pre-pandemic levels.
New business wins increased to £2.5bn, with strong contributions from North America and Europe, with the company adding that the first-time outsourcing market “remains buoyant”, accounting for 45% of new business wins.
Mr Blakemore added: “Having completed the previously announced share buyback of £500m, we have announced a further share buyback of up to £250m, taking the total to £750m. Looking further ahead, we remain excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels and rewarding shareholders with further returns.”
The group is set to pay a final dividend of 22.1p per share as a result of its financial performance over the past year.