Compass Group PLC shares fell 7.7% to 2,050p on Thursday despite posting a trading update for what it called a strong start to the year and reaffirming its full-year guidance.
The FTSE 100 catering group reporting 7.3% organic revenue growth for the first quarter, which was down from the 8.7% growth seen in the past full year.
Guidance for the 2026 financial year was reiterated for roughly 10% growth in underlying operating profit and around 7% organic revenue growth, with an additional 2% revenue boost from acquisitions.
The company said it had seen broad-based growth across regions and sectors, with its Sports & Leisure and Business & Industry divisions the fastest-growing areas.
Corporate cafeteria catering achieved double-digit growth in North America, helped by new outsourcing contracts and demand from the tech sector.
Compass also plans to switch its trading currency on the London Stock Exchange from sterling to US dollars from April. The move is aimed at reducing volatility and aligning its share price with its reporting currency. Dividends will still be paid in sterling unless shareholders request otherwise.
Chief executive Dominic Blakemore said: “We have delivered a strong start to the year with broad based growth across every region and sector.”
Net new business growth was within the company’s 4-5% range, and client retention remained high at over 96%.
The company said new business wins over the past year had annualised at $4 billion, nearly half of which came from first-time outsourcing contracts.
Compass also confirmed it had completed the $1.7 billion acquisition of Vermaat, a Netherlands-based food services provider with operations in France and Germany. The deal expands Compass' presence in Europe and brings additional retail and hospitality expertise.
The shares have now fallen more than 25% over the past year, back to levels seen in early 2024.