Provides contract food, catering and support services to a wide range of commercial businesses and government departments operating in over 50 countries. I have a holding in my income portfolio (epic code: CPG).
Compass issued a trading statement today ahead of its year-end. For
the full year, they expect organic revenue growth at constant currency to be
just over 4%. If you Include the contribution from acquisitions, revenue growth is
expected to be towards 4.5%.
The underlying operating profit margin for the
full year is expected to be over 7% for the first time, and 20 basis points
higher than last year's 6.9%. They also mention that free cash flow conversion remains strong.
By territory North
America's organic revenue growth will be around 7.5% and the operating margin is expected to
improve by 10 basis points. Europe & Japan's organic revenue growth for the
full year will decline by around 3% but the operating margins to improve by 50 basis points. Fast growing & emerging markets' organic revenue
growth for the full year is expected to be around 10%, but
the margin is expected to decline by around 20 basis points compared to last
year.
Looking ahead to next year, management state that the pipeline of new
contracts in North America and Fast Growing & Emerging is encouraging and they expect to see further good performances, but economic conditions in Europe to remain challenging.
Another good performance from a well run business that has delivered sustainable dividend growth. It's just a pity they persevere with a £400m share buy-back programme at a P/BV that makes it unattractive to investors.
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