Compass remains bullish on growth amid strong trading

Catering giant Compass Group has said it will continue to focus on strategic acquisitions to drive growth off the back of strong trading.

The contract caterer spent £296m on mergers and acquisitions in the six months to the end of March, including buying German caterer Hofmann-Menü Holdings last year.

Its estimated £475m takeover of CH&Co in the UK and Ireland completed in April.

Compass said it had invested £550m in growth during the period to provide a more “tailored offer to clients”.

The group reported revenue growth of 11.2%, which was driven by a 3.7% rise in new business.

Group underlying profit also grew by 18.7%, while statutory profit before tax rose from £786m in 2023 to £952m.

Within Europe, underlying operating profit also grew by 17.8% to £221m, which was helped by double-digit increases in growth rates from its business and industry, education and defence, and offshore and remote sectors.

Compass incurred a net charge of £75m for exiting the market of six countries, as well as the sale of a business, site closures and terminations in the UK.

In its report, the caterer stated: “Our sector and sub-sector approach remains a key competitive advantage. We are continuing to develop our brand portfolio, particularly in Europe, and are also increasing investment in more flexible operating models with compelling financial returns.”

Compass has raised its profit guidance by 15% for the full year off the back of the strong results.

Compass group chief executive Dominic Blakemore said: “We will continue to reinvest in the business to support future growth, with any surplus capital returned to shareholders, as we maintain our strong track record of delivering long-term, compounding shareholder returns.”