Catering giant Compass Group PLC (LSE:CPG) saw its shares fall despite half-year revenues and earnings coming in higher than forecast and guidance being upgraded.
The shares fell 3.75% to 2,234p, retreating from recent all-time highs in apparent profit-taking by investors.
Organic revenue growth in the second quarter slowed to 10.8% from 11.7% in the first but this was better than expected, helped by the performance in North America and Europe. Compared with pre-Covid, momentum improved sequentially to 138% from 135% in the first quarter.
Half-year revenues of $20.7 billion were up 11.2% year on year, though slightly behind consensus forecasts.
Underlying profits (EBITA) came to $1.47 billion, which was roughly in line with the average City forecast.
Earnings per share of 59 cents was 2% above consensus, driven by the better organic revenue and margins being in line with estimates.
On the full-year outlook, directors said they now expect underlying operating profit growth towards 15%5 with organic revenue growth towards 10%.
Analysts at Jefferies said they expected full-year consensus estimates are "likely to remain unchanged today" as increased organic revenue growth guidance was consistent with rivals Aramark and Sodexo’s recent narrative, and EBITA growth was in line.
"Compass is entering a sweet spot as high net new business, EBITA margin recovery and M&A tailwinds converge," wrote analyst Kean Marden in a note to clients.