Catering giant Compass reports a recovery that beats expectations

Compass says its profits have almost tripled during the past year in a recovery that has surpassed expectations.

The world's largest food services provider said it has seen record growth as the demand for catering in business and sports has rebounded following the worst of the coronavirus pandemic.

Statutory pre-tax profits were £1.5bn in the year to 30 September, up from £545m a year earlier, while revenues surged by 42.5% to £25.5bn for the year.

Dominic Blakemore, group chief executive of Compass, said: "The group's performance surpassed our expectations both in terms of net new business growth and base volume recovery, with business and industry now operating above its pre-pandemic revenues.

"The strong growth trends seen in the first half have continued, with net new business accelerating through the year in all our regions."

Compass supplies businesses such as offices, universities and care homes and, like many, it has had to deal with the rising cost of food and labour.

It has cut its menu offerings and changed some ingredients - for example, switching from sunflower oil to rapeseed oil in the UK.

But as more businesses look to cut their own costs, many are increasingly outsourcing expenses such as canteen needs - good news for Compass and other catering firms looking for new customers.

Read more from Sky News:
Autumn statement key announcements
Inflation at highest level since 1981

Compass said that new business wins increased to £2.5bn, with first-time outsourcers accounting for about 45% of that, while the rest moved from competitors or smaller players.

Underlying operating profits are expected to rise by around 20% in 2023, as the new outsourcing market "remains buoyant", the company added.

Mr Blakemore said: "Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalising on the resulting growth opportunities.

"While the macroeconomic environment is uncertain, we are working in partnership with our clients to mitigate inflationary pressures and supporting our colleagues during this challenging period by offering financial support and other benefits."

Compass, which has a presence in 40 countries, will pay a final dividend of 22.1p per share as a result of its performance.