Compass gives dividend cheer but cautions against worker shortage and cost

Catering giant Compass has resumed shareholder dividend payments as the easing of pandemic restrictions led to a higher jump in annual profit, but the group cautioned on labor shortages and rising costs.

The world’s largest caterer saw pre-tax profit more than double to £464 million in the year to 30 September from £210 million in the previous year.

Results were hit by cost-cutting actions to weather the COVID-19 crisis, while revenues also rose to 88% of pre-pandemic levels by the fourth quarter, as economies reopened.

During the full year, revenue fell 10.2% on a statutory basis to £17.9 billion, or 6.3% on an underlying basis.

The group, which halted its dividend in April last year when the pandemic struck, resumed payouts with an annual div of 14p per share as it posted new trading winnings of around £1.2bn.

Demand for food catering is back as universities and schools reopen for face-to-face teaching, while workers have also returned to offices and events have resumed once again.

The group said it is seeing more new business as companies outsource their catering needs for the first time in an effort to cut costs.

But while the group painted a picture of ongoing reform, it also cautioned against inflation and near-time pressures of labor shortages.

It said progress on margins will likely be weighted for the second half of 2021-22 as it faces rising cost pressures.

Shares fell more than 1% despite divine cheer.

Compass said: “There is still some uncertainty in the macroeconomic environment, particularly as it relates to labor shortages, inflation and the pandemic, which we expect to impact our business in the near term.

“That said, the new business pipeline remains strong and we remain very confident in the Group’s long-term growth potential, supported by exciting significant structural market opportunities globally.”

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