Compass beefs up buyback in spite of its European troubles

 
City A.M. Reporter
COMPASS Group, the world’s biggest caterer, posted a nine per cent rise in full-year profit yesterday, and pledged to return a further £400m to shareholders.

The group, which serves 4bn meals a year in 50 countries, said it will add to its buyback scheme next year, in addition to its £500m scheme expected to end this year.

Underlying operating profit rose nine per cent to just under £1.2bn in the year to 30 September, in line with a company compiled analyst consensus. Revenue grew eight per cent to £16.9bn.

When one-off items such as a shake-up in Europe are included, pre-tax profits fell 17.6 per cent to £789m.

Compass, which provides catering and support services to companies, schools and sports venues, said new work at its North American business – worth almost half of group revenue – had driven group profit.

Revenue in its emerging markets division grew by 13.7 per cent, with Europe, a weak spot for the firm, up 0.4 per cent.

In September Compass announced it would slash its southern operations by a quarter, exiting contracts and non-core activities in countries like Spain, Italy and Portugal, where tough economic conditions have hit hard.

The firm said it expects to meet expectations in 2013 as a result.