14 May 2025
If you are covering the latest financial results from Compass, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Compass reported a solid set of half-year results this morning, to the end of March, which came in line with consensus. Group organic revenue growth is up 8.5%, which implies that sales grew 7.8% in the second quarter, significantly ahead of peers Sodexo (2.1%) and Aramark (3.1%). However, while Compass is beating off the competition, this does also suggest a slight slowdown in growth from the first quarter as volumes normalise.
“Growth has been driven by net new business wins, which at 4.4% was within the group’s target range, with pricing and volume also positively contributing. Client retention, another key KPI which investors like to focus on, was also strong at 96.2%.
“Compass has left its 2025 guidance unchanged, pointing towards organic revenue growth above 7.5% and high single digit underlying operating profit growth. While the economic backdrop is perhaps not the most favourable right now, Compass’ services remain in demand as businesses look to reduce their own overheads.
“As such, it has quite a resilient business model which is both flexible and has significant scale. Its supply chains are predominantly local, and the group remains well placed to benefit from any increase in outsourcing due to macro pressures.”
