15 May 2024
If you are covering Compass’ latest financial results, please find below a comment from Mamta Valechha, consumer discretionary analyst at Quilter Cheviot:
“Compass’ results for the 6 months to the end of March saw organic growth ahead of consensus and slightly better margins, with guidance also upgraded for the year.
“All regions are delivering double digit growth, driven by primarily by pricing and net new business wins, and to a lesser extent volume growth which is expected to moderate as Compass laps strong comparators from the prior year. While growth was balanced across sectors, the release did point out that the strongest volume growth was seen in the Business & Industry sector, driven by return to office trends in both the US and Europe.
“After what was a relatively quiet 2023, M&A is gathering pace as Compass seeks to replicate its strong portfolio in the US, in Europe, focusing on key structural opportunities and exiting sub-sale territories. This is on the back of strong cash flow generation and low leverage, which also saw Compass increasing its interim dividend versus last year.
“We continue to like Compass given the outsourcing market remains very attractive, driven by complexities such as increased regulation, sustainability, changing dietary expectations and inflation, all of which are here to stay and Compass is primed to take advantage of.”
