Compass Group Plc (LON:CPG) today announced full year results for the year ended 30 September 2018
|
Underlying1 results |
Statutory results |
|||||
|
|
2018 |
2017 |
Change |
2018 |
2017 |
Change |
|
Revenue |
£23.24 billion |
£21.84 billion2 |
5.5%3 |
£22.96 billion |
£22.57 billion |
1.8% |
|
Operating profit |
£1.74 billion |
£1.63 billion2 |
7.1%2 |
£1.69 billion |
£1.67 billion |
1.5% |
|
Operating margin |
7.4% |
7.4% |
|
|
|
|
|
Earnings per share |
77.6 pence |
69.0 pence2 |
12.5%2 |
71.0 pence |
71.3 pence |
(0.4)% |
|
Free cash flow |
£1.14 billion |
£0.97 billion |
17.1% |
|
|
|
|
Annual dividend per share |
37.7 pence |
33.5 pence |
12.5% |
37.7 pence |
33.5 pence |
12.5% |
1 Reconciliation of statutory to underlying results can be found on page 37.
2 Measured on a constant currency basis.
3 Organic revenue growth.
Organic revenue up 5.5%
· Excellent growth in North America with organic revenue up 7.8%
· In Europe organic revenue grew by 2.1% driven by strong net new business in the UK
· Rest of World was up by 2.9% due to good growth in Turkey and Spanish speaking Latin America
Operating margin of 7.4%, up slightly as expected
· Continued mix benefit of higher margins in North America
· Strong improvement in Rest of World offset the margin pressures in the UK
Strong EPS and dividend growth
· Constant currency EPS growth of 12.5% and dividend up 12.5%
Executing our strategy of focusing on our core food business
· Making good progress on our disposal programme
· Consolidating best practices to be shared and adopted across the Group more systematically
· Net debt to EBITDA at 1.5x in line with leverage target
Statutory results
· Revenue, operating profit and earnings per share growth on a statutory basis were lower than underlying results mainly due to the adverse impact of foreign exchange during the year
Dominic Blakemore, Compass Group Chief Executive, said:
“Compass had another very strong year. Revenue growth was healthy, driven by excellent growth in North America, an acceleration in Europe and good progress in Rest of World.
We continue to drive operating efficiencies around the business and were able to move the margin slightly forward, with improvements in Rest of World offsetting a more difficult volume and cost environment in Europe, especially the UK.
Given the excellent cash generation and overall strength of the Group, we have invested in the business to support the exciting long term growth opportunities we see. At the same time, we continued to reward our shareholders with strong dividend growth while reducing our leverage back to our target of 1.5x net debt to EBITDA.
We are making progress with our strategy to focus on Performance, People and Purpose. We have codified our best practices around the Group and will now use our Management and Performance (MAP) framework to roll them out across our larger markets.
We are actively managing the portfolio to increase our focus on food and are in the process of disposing of up to 5% of revenues in non-core businesses. We continually look at bolt-on acquisition opportunities that strengthen our offer and meet our strict returns criteria.
Our expectations for FY2019 are positive. The pipeline of new contracts is strong and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of progress. We expect organic growth to be in the middle of our 4-6% range with modest margin progression.
In the longer term, we remain excited about the significant structural growth opportunities globally, the potential for further revenue growth and margin improvement, combined with further returns to shareholders.”
