“This has been another period of consistent delivery for Compass”
Richard Cousins, Group Chief Executive
Compass interim results and plans to return £1bn to investors have received a generally positive welcome in the market.
For the six months ended 31 March Compass reported total revenue of £8.7bn, up 4.2% on 2013. Underlying profit before tax was £608m, up 5.7%. The reported figure was £595m, taking into account various exceptionals.
Richard Cousins, Group Chief Executive, commented: 'This has been another period of consistent delivery for Compass. Organic revenue growth of over 4% has been driven by strong growth in North America and Fast Growing & Emerging.
'Encouragingly, economic conditions and new business in Europe & 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 of 10 basis points, taking it to 7.4%.”
Cousins added, 'Strong cash generation has underpinned our investment in the business and our commitment to reward shareholders. Based on the ongoing strength of our performance, the Board is proposing to increase the ordinary interim dividend by 10% to 8.8 pence per share and return a further £1bn of cash to shareholders through a special dividend.
'Looking forward, the outsourcing proposition remains compelling and I'm positive about the opportunities for further revenue and margin progression.”
In the Europe & Japan segment, which accounts for 34% of the group figure, reported revenue was down 4.2% to £2951m. Underlying operating profit was ahead slightly – 0.5% - to £213m.
Compass said it was seeing ‘good’ levels of new business, in particular in the UK & Ireland, France, Spain, the Netherlands and the Nordic region. It was also making ‘good’ progress on cost reduction and operational efficiencies, which shows in the rise in both operating profit and operating margin.