Compass Group reveals £1bn special dividend as a weaker pound boosts sales

Courtney Goldsmith
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Compass said the weak pound boosted revenue (Source: Getty)

Catering giant Compass Group announced it will give £1bn back to shareholders as profit jumped in the first half of 2017 due to a weaker pound and strong trading in North America.

The figures

The world's biggest caterer said on a statutory basis, revenue, operating profit and earnings per share benefited by over 15 per cent from the impact of weaker sterling.

Profit before tax increased about 22 per cent to £831m from £666m the previous year while revenue increased more than 20 per cent to £11.47bn from £9.54bn in 2016.

Compass' proposed interim dividend increased 5.7 per cent.

Shares in the group were up one per cent by mid-afternoon.

Read more: Catering group Searcys put up for sale with price tag of £25m

Why it's interesting

The FTSE 100 group, which serves around 5bn meals every year, said it is committed to ongoing returns to shareholders with its proposed £1bn special dividend.

Full-year expectations remain "positive and unchanged" as the group benefits from the pound's depreciation since the Brexit vote while trading in North America shows "excellent" growth and trends in Europe improve. The company's growth is weighted towards the second half of the year.

Read more: Compass looks to good half year growth

What Compass said

Richard Cousins, chief executive, said: "Given our excellent cash generation and the strength of the business, we are announcing a £1bn special dividend. This reflects our commitment to return surplus cash to shareholders whilst maintaining an efficient balance sheet."

Our expectations for financial year 2017 are positive and unchanged, with growth weighted to the second half. Our pipeline of new contracts is encouraging and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of delivery.

"In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue growth, margin improvement, as well as continued returns to shareholders."

Read more: Compass gives back £1bn to shareholders

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