Compass Group sees its share price jump on back of strong first half
British catering giant Compass Group – the world’s largest caterer – has had such a good first half to the year that it now expects growth and margins “similar to 2018” according to its CEO, Dominic Blakemore. That’s great news for investors, as 2018 was a strong year for the group that saw it log organic revenue growth of 5.5% and operating margins of 7.4%.
Compass Group’s share price jumped on the back of a strong first half
Source: Yahoo Finance
Blakemore praised the “very strong first half” of the year ended March 31, which saw revenues increase 6.6%, year on year to £12.5 billion. That was a beat against analysts’ expectations. Compass Group also performed well on earnings, which rose 5.8% against the year-ago quarter to £951 million. Driving these results was “excellent growth” in North America (up 7.9%, year on year), and solid increases in Europe (up 5.5%, year on year).
Blakemore also praised “continuing good performance” in developing markets, and said that Compass Group remains “excited” by the “significant structural growth opportunities” it sees around the world. On an earnings call with analysts, he said:
“I'd like to update you on our priorities to drive our performance in the future. But first, it's worth reminding ourselves what a strong business we are today. Over the years, we've built significant competitive advantages. These advantages allow us to exploit the structural growth opportunity in our industry.
We're the global leader with just a 10% market share. We're incredibly proud of our leadership position, but we're not complacent. We're putting an intense focus on maintaining that leadership position and capitalizing on the attractive future growth opportunities.
As you know, the foodservice market is evolving. We see trends ranging from organic and locally sourced produce to health and wellness and topically, the desire for convenience. We have been evolving, and we'll continue to evolve with this changing environment.”
Dominion holds Compass Group in its Global Trends Managed Fund.
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