(Reuters) – Catering group Compass Group expects 2024 underlying operating profit to grow about 13%, aided by strong demand leading to high single-digit organic revenue growth and stronger margins, it said on Monday.
It also announced a further $500 million in share buyback, after completing a $750 million buyback earlier this month.
Compass, the world’s largest catering group, said adjusted operating profit rose nearly 30% to 2.12 billion pounds ($2.64 billion) for the year ended Sept.
30, in line with market expectations.
The company, which provides food catering services to offices, universities and sports stadiums across 35 countries, has benefited from new businesses and high prices, although red-hot food and wage inflation has been a drag on its margins in the past year.
“Going forward, we expect to sustain mid to high single digit organic revenue growth and ongoing margin progression leading to profit growth ahead of revenue growth and increased cash generation,” CEO Dominic Blakemore said in a statement.
Compass also announced that after its year end, it bought a German producer of cook and freeze meals, Hofmann Menü-Manufaktur GmbH, and exited its small operations in Argentina and Angola.
Annual underlying revenue grew 18.8% to 31.3 billion pounds, registering growth across its markets.
In financial year 2023, it signed 2.7 billion pounds of new business, with first-time outsourcing accounting for about 50%.
($1 = 0.8025 pounds)
(This story has been corrected to specify that the company operates in 35, not 40, countries in paragraph 4)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi Aich)
