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Compass hits 100% of pre-Covid revenues in half year results

Compass Group PLC, the world’s largest food service provider, which operates in 44 countries, employs around 480,000 people globally and serves millions of meals every day, has just issued its Half Year results for the six months ended 31 March 2022.

The group has delivered another strong performance, hitting 100% of pre-Covid revenues by the end of the period - a major milestone for the business - alongside record new business wins and its highest ever client retention rate.

Performance summary
• Q2 underlying revenue at 99% of 2019 revenues with run rate now above our pre-Covid level
• Organic growth of 37.9% driven by strong performance in North America and Europe
• Excellent net new business growth, total in HY 2022 exceeds entire FY 2021 net new business
• Operating margin of 5.8%, an increase of 240bps on HY 2021

Operational highlights
• Strong growth across all sectors, with notable volume recovery in Business & Industry and Education
• Record new business wins of £2.5bn over the last 12 months, with broad based growth across all regions
• Client retention rate at highest ever level of 95.8%
• Net M&A expenditure of £109m, further increasing our presence in delivered-in solution

Compass has made further progress on its margin, maintaining its FY guidance despite current inflationary pressures, while upgrading its organic growth guidance to around 30% for the full year (up from 20-25%). Given its confidence in the future, the firm has also announced a £500m share buyback programme, commencing later this year.

Operationally, Compass has seen a notable recovery in its Business & Industry sector, as more clients use free food and events to entice people back to the office, and supported by increased uptake in its digital offering.

Sustainability initiatives continue to be a key competitive advantage with clients and consumers, with the company rolling out carbon labelling and more plant-forward options across more of its sites.

While inflation remains a challenge for everyone, the group's procurement scale, culinary innovation and resilient business model are helping it to mitigate this while still remaining price competitive versus the high street, with inflation also creating opportunities by driving more organisations to outsource their catering for the first time.