Compass raises sales outlook after business catering recovers

Catering giant Compass Group has lifted it sales growth targets after sealing new customers and reporting a strong recovery in business catering since the easing of Covid curbs.

Shares in the FTSE 100 company made gains on Tuesday morning after its second upgrade to forecasts this year.

Compass, which runs catering services for many schools, businesses and the armed forces, said it expects organic revenues to jump by 35% over the current financial year.

It had previously predicted that revenues would rise by 30%.

The group, which operates in 44 countries, said it has been “particularly pleased” by the rebound in its business and industry arm, as workers have returned to their offices following the pandemic.

Sales have also been boosted by the return of entertainment events and sporting tournaments.

It said it has also benefited from an increase in new customers as firms have turned to outsourcing for the first time due to operational pressures and inflation.

Compass also revealed that group revenues increased 43.4% over the quarter to June, compared with the same period last year.

“While we are mindful of the challenging macroeconomic environment, we remain excited about the significant structural growth opportunities globally,” the company said in a statement.

“With a clear strategy, operational scale, and market leading offer, Compass is very well positioned to capitalise on the increase in outsourcing opportunities.

“Longer term, we expect revenue and profit growth above historical rates, returning margin to pre-pandemic levels, and rewarding shareholders with further returns.”