COMPASS, the catering firm, will reveal plans this week to return up to £500m to shareholders by buying back shares.
Analysts expect the group, which serves four billion meals each year in more than 50 countries, to announce the buyback alongside its full-year results, with profits expected to exceed £1bn.
In a recent trading update the group, led by chief executive Richard Cousins, said a healthy cashflow meant that it could boost payouts to shareholders or fund more acquisitions.
The Surrey-based company embarked on an aggressive acquisition spree this year, spending over £400m buying up smaller rivals. That included its recent acquisition of Cygnet Foods, a giant school catering firm.
Analysts at Barclays Capital expect Compass to give more details on the success of previous acquisitions and their future strategy and said the firm is likely to announce a £500m cash return – probably in the form of a share buyback.
The bank forecasts that the group’s pre-tax profits will increase 10.5 per cent from £922m to £1.03bn, on sales up 8.7 per cent to £15.7bn.
Sales in the UK and Ireland, which account for 10 per cent of group earnings, will be down one per cent on the previous year as companies cut their spending on catering and hospitality amid government austerity measures and a slow economic recovery.
In its recent interim management statement, Compass remained cautious over its outlook in the UK and Europe but overall it remained positive about opportunities to grow the business.
The group’s shares closed down 1.06 per cent to 562p on Friday.