Compass Group shares jump 5% on back of strong first quarter
The world’s largest catering company, Compass Group, which provides services to public bodies (like the British National Health Service) as well as private companies, reported first quarter earnings for 2018 last week. The company said that revenue rose by 5.9% against the first quarter of 2017, thanks to a combination of new business and strong like-for like revenues. Investors liked what they saw, sending the share price up sharply on the day.
Compass Group’s share price jumped last week on the back of strong quarterly earnings
SOURCE: Yahoo Finance
The company had a strange and difficult start to the year. Outgoing CEO Richard Cousins – long considered to be a major factor in the company’s success over the last decade – was tragically killed in a plane crash along with his family. This pushed new CEO, Compass-veteran Dominic Blakemore, into the role earlier than expected. Strong quarterly results are a welcome reminder that the company is on the right trajectory.
In a statement, Compass told the press: "We continue to focus on driving efficiencies throughout the business and expect modest margin progression on a full year basis, albeit second half weighted. In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue and margin growth."
The company also said it is “positive” about 2018, and expects organic growth to be “at least in the middle” of its target range of 4% to 6% for the full year.
Dominion holds Compass Group in its Global Trends Managed Fund.
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