Compass Group had a storming 2022 FY with revenue and new business surging on strong performance in North America and Europe.
Compass Group revenue grew 37.5% to £25.8bn in 2022 – and their 4th quarter sales were 116% of pre-pandemic 2019 levels.
The food services group saw their North American sales grow 53.4% on a reported basis and now accounts for 66.5% of group revenue. Europe’s share retreated to 23% from 25% in 2021.
Shares were slightly weaker on Monday, but Compass Group shares are still 23% higher over the last 52 weeks.
“On all metrics, this was a very strong year for Compass. Growth isn’t just coming from price increases, but also from new customers which the Group said exceeded its own expectations,” said Derren Nathan, Head of Equity Research at Hargreaves Lansdown.
“New business wins totalled £2.5bn, with a strong contribution from both North America and Europe. Pleasingly, 45% of this was from customers who were outsourcing their contract catering requirements for the first time. We see this as reflective of long-term structural drivers that Compass Group is benefitting from and it’s a class operator, with customer loyalty reaching record levels.”
The group announced a £250m share buyback programme which may have disappointed some investors that were hoping for more. Nonetheless, Compass Group’s dividend jumped to 31.5p in 2022, up from 14p in 2021.