Compass Group PLC (LSE:CPG), the catering service company, dished out a strong set of results on Monday, serving up additional cash returns for shareholders.
A new buyback programme aiming to repurchase £410 million worth of shares in 2024 was confirmed, while the group has proposed a final dividend of 28.1p for the year just ended.
Revenues jumped over 18% to reach £33.1 billion in the financial year to 30 September 2023, helped equally by volume and price growth, while increases in new business lifted 5% higher than historical norms.
Businesses throughout varying industries have been forced to cut costs, jobs and divisions and therefore Compass experienced an uptick in companies outsourcing its services.
Supply chain worries and changes in regulations were offset by the organic growth opportunities and allowed for underlying profits to rise a little under 30% to reach £2.1 billion.
Derren Nathan, at Hargreaves Lansdown PLC (LSE:HL.), commented: “This was reflected in the fact that 50% of the £2.7bn of new business won over the year came from customers dipping their toes into outsourcing for the very first time.
“Compass is the market leader but with a share of less than 15% and 50% self-operated there’s a lot to go for. That should give it some shelter from macroeconomic pressures and the guidance given for the new financial year could leave some room for upside.”
Compass is trading 5% lower on Monday, having opened at 1,993p.