Interim results for six months to 31 March 2014 have been published by the world’s biggest contract catering company, Compass Group, and reveal the Board is returning £1bn of cash to shareholders through a special dividend.
The group’s revenue has jumped 4.2 per cent to £8.7bn and operating profit stands at £647m, up 5.5 per cent.
The group, which caters for events such as Wimbledon and the Academy Awards, says its organic revenue growth has been driven by strong new business growth, with excellent performances in North America which accounts for 45 per cent of group turnover.
Compass reports a healthy pipeline of new business across all regions and fast growing and emerging markets in China, India, Australia, Brazil and Turkey.
Richard Cousins, Group Chief Executive, said: “This has been another period of consistent delivery for Compass. Organic revenue growth of over four per cent has been driven by strong growth in North America and fast growing and emerging markets. Encouragingly, economic conditions and new business in Europe and Japan are starting to improve.
“The operating efficiencies we’ve generated have enabled us to invest in the many growth opportunities we see, as well as deliver an improvement in the operating margin.
“Strong cash generation has underpinned our investment in the business and our commitment to reward shareholders. Looking forward, the outsourcing proposition remains compelling and I’m positive about the opportunities for further revenue and margin progression.”
Some of that future growth could come from growth in the outsourced food service business, a market estimated to be worth £200bn worldwide.
“With only around 50 per cent of the market currently outsourced, it represents a significant opportunity,” said Cousins. “We believe the benefits of outsourcing will become ever more apparent as economic conditions and regulatory changes put increasing pressure on organisations’ budgets.”
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