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Profits have soared at catering giant Compass as annual revenues surpassed pre-Covid levels and the business completed its recovery from the pandemic.
Underlying revenues increased 37.5% to £25.8bn in the year to 30 September, driven a record amount of new business wins, sectors reopening from lockdown restrictions and higer prices.
It put the group 5% ahead of 2019 levels, with the recovery accelerating throughout the year to 16% higher than pre-pandemic in the fourth quarter.
All sectors and regions traded above pre-pandemic levels during the second half of 2022, with business & industry seeing a notable improvement as employees returned to work. Education and sports & leisure also performed particularly well, with revenues 17% and 25% ahead of 2019 revenues, respectively, in the fourth quarter.
As a result of the growth, underlying operating profits leaped 87.5% to £1.6bn.
In the new financial year, Compass forecast its unerlying operating profit growth to be above 20% as organic revenues were expected to climb 15%.
The group also announced a further share buyback of up to £250m, taking the total to £750m following an earlier £500m buyback, and raised the annual dividend to 31.5p a share.
CEO Dominic Blakemore said the group’s performance surpassed expectations in terms of net new business growth and base volume recovery.
“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,” he added.
“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.”
Shares in the group fell 2.5% to 1,803.5p as markets opened.
Morning update
Beleaguered manufacturing group Real Good Food has secured an additional £2.5m funding to support its ongoing turnaround.
The funding to the business, which specialises in cake decoration, is being by Hilco Private Capital for a term of 12 months and supplements the existing £6.3m facility with Leumi ABL.
Executive chairman Mike Holt said the funding supported the “radical reform” of Real Good Food, which is intended to reduce costs, protect revenues and preserve the inherent value of the group.
“With support from both customers and employees, we are making good progress on the required reforms and several major customers have already agreed to significant price resets.
“We are confident that the right actions are being put in place to return the business to sustainable profitability and being cash generative.”
Naked Wines has appointed Stephen Bolton as a non-executive director with immediate effect.
He will also join the group’s audit committee as chairman following the release of interim results.
Naked said Bolton was “a seasoned finance director”, with almost 40 years of experience in operational and strategic finance, investor relations, M&A, and internal audit, risk and compliance.
He spent 13 years with Diageo, including as its group controller for eight years, head of global audit and risk for three years and finance director global supply and procurement for two years.
He is also an experienced non-executive director, serving on the boards of footwear group Clarks, where he chairs the audit committee, and Sedex, an ethical trade membership organisation.
Naked chairman David Stead said: “I would like to welcome Stephen to the Naked Wines board, as we move forward with our recently-announced operational and financial plan.
“His experience as a finance executive with a leading, international alcohol beverage company will be invaluable to Naked Wines during this new chapter.”
The FTSE 100 started the new week down 0.4% to 7,359.78pts.
Shares in Real Good Food shot up 11.4% to 1.2p on news of new funding.
Other early risers included Naked Wines, up 5.6% to 103.8p, McBride, up 4.1% to 24p, and HelloFresh, up 3.7% to €25.06.
Fallers so far included Ocado, down 3.5% to 654.6p, M&S, down 3% to 119.8p, THG, down 2.9% to 64.5p, and Science in Sport, down 2.7% to 14.5p.
This week in the City
The start of a controversial World Cup in Qatar looms large over this week, with both England and Wales kicking off in their respective opening matches later today.
In terms of fmcg, tomorrow brings first-half results from meat producer Cranswick, while in the US, Campbell Soup and Hormel Foods report quarterly results.
On Wednesday, drinks group Britvic publishes annual results, with interims from Pets at Home.
The rest of the week looks quieter, with Thanksgiving in the US on Thursday.
Friday brings full-year numbers from pub group Mitchells & Butlers and a trading update from Devro.
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