The UK-based contract catering and foodservice company credits a ‘step change’ in its European performance and higher-than-average net new business for its steady half-year group sales growth
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Compass Group forecasts full-year operating profit growth of 30% | Photo credit: via Shutterstock
Compass Group has reported steady half-year sales growth globally and raised its revenue and operating profit targets for its fiscal year 2023.
The UK-based contract catering and foodservice company achieved 25% revenue growth for the six months ended 31 March 2023 to reach £15.8bn ($20bn), while operating profit increased 41% to £1.05bn ($1.3bn).
Compass Group cited a ‘very strong’ performance in Europe during the period and reported ‘excellent’ net new business growth of 5.2% alongside robust client retention.
As part of its growth strategy, Compass Group exited six countries in the reporting period to focus on markets with higher growth opportunities.
The Surrey-based business is seeking to accelerate revenue growth in North America across the next six months and continue to ‘build a track record of growth’ in Europe.
If achieved, Compass Group forecasts full-year operating profit growth of 30%, 10% higher than outlined in September 2022, alongside revenue growth of 18%.
“The group performed strongly in the first half of the year, benefiting from balanced growth across all regions. Net new business continued to be excellent, and significantly higher than our historical rate. We are particularly pleased with the step change in our Europe performance which has benefited from growth initiatives as well as favourable outsourcing conditions,” said Dominic Blakemore, CEO, Compass Group.
“Despite pockets of macroeconomic weakness, the outsourcing market remains very attractive. Longer term, we expect the growth opportunities in the market to sustain mid-to-high single-digit organic growth and a path back to our historical margin, leading to profit growth above revenue growth,” he added.
Compass Group is one of the largest contract foodservice companies in the world with 55,000 client locations across 40 countries. The group’s sales reached £28.5bn ($33.7bn) in 2022, representing 98% of 2019 levels.