26 July 2022
If you are covering Compass Group’s latest results, please find below a comment from Mamta Valechha, equity research analyst at Quilter Cheviot:
“Compass reported a strong set of Q3 results this morning, providing a big beat and also raised organic growth guidance for the full year. Q3 organic sales grew over 43%, which is an acceleration from the 38% in H1.
“All regions and segments are now trading above 2019 levels, including Business & Industry which had been the slowest to recover, as people return to offices, showing the most bearish WFH scenarios to be wildly pessimistic.
“As well as pricing contribution and volume recovery, the beat was also driven by continued strong client retention and net new business wins. New business growth continued to accelerate in the quarter and at 7% was more than double Compass’s historical rate, benefiting from an increase in first time outsourcing due to ongoing operational challenges and heightened inflation. This is very encouraging as new wins will flow into the outer years as organic growth.
“We continue to like Compass, due to this strong contract win momentum, solid cost control, its relative defensiveness in a downturn, and its ability to pass on inflation.”
