Shares in Compass Group (LSE: CPG) lifted marginally in early trade this morning, following the release of the support services group’s latest trading statement.
Management stated that “expectations for the full year remain positive and unchanged”, with operating profit margin for the full year expected to be over 7% for the first time in the company’s history.
Additionally, organic revenue growth is anticipated to be just over 4%, rising to 4.5% when the contribution from £105m worth of acquisitions (year to date) is included, driven by “strong levels of new business wins, good retention rates and modest inflationary price increases”.
In line with many Footsie results we’ve seen recently, volumes are expected to be negative in Europe & Japan, positive in fast-growing/emerging countries and broadly flat in North America, where operating margin is expected to be over 8%.
On the future, Compass Group stated:
“Looking forward, we remain very positive about the opportunities to grow the business and we are well placed to capitalise on the significant structural growth potential in both food and support services globally. We also expect to deliver further cost efficiencies which will help to support future growth and enable us to make further progress in the operating margin. As a result we remain confident in our ability to continue to create significant value for our shareholders.”
The shares currently trade on a consensus forecast yield of 2.7%, and at around 840p have increased almost three-fold in five years from a 2009 low of 282p.
