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Compass: annual results in line, but unexpected charge
(CercleFinance.com) - On Tuesday, Compass reported annual results in line with market expectations, although the announcement of a surprise provision linked to the discontinuation of an in-house technology project seemed to shake investors.
This morning the British catering group reported that it had had to book a $160m charge in its annual accounts due to the discontinuation of the deployment of a new enterprise resource planning (ERP) software.
While this provision should have little impact on cash flow, RBC analysts are concerned about its potential effect on the company's margins and earnings.
Otherwise, FY 2024/2025 sales were $42.2bn, with organic growth of 10.6%, in line with market expectations.
Its recurring operating profit rose by 16.4% to almost $3bn, again in line with analysts' forecasts.
FY 2023/2024 delivered a solid operating and financial performance, with an acceleration in the signing of new contracts in net terms in H2, as expected, company management said.
For FY 2024/2025, Compass says it is targeting growth in recurring operating profit of close to 10%, based on expected organic business growth of over 7.5%, accompanied by a further improvement in its operating margin.
Following this unsurprising publication, the share was subject to profit-taking on Tuesday morning on the London Stock Exchange, posting the second biggest drop on the FTSE 100 index, down 2.2%.
Note that at last night's closing price, the share was up over 25% YTD.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
This morning the British catering group reported that it had had to book a $160m charge in its annual accounts due to the discontinuation of the deployment of a new enterprise resource planning (ERP) software.
While this provision should have little impact on cash flow, RBC analysts are concerned about its potential effect on the company's margins and earnings.
Otherwise, FY 2024/2025 sales were $42.2bn, with organic growth of 10.6%, in line with market expectations.
Its recurring operating profit rose by 16.4% to almost $3bn, again in line with analysts' forecasts.
FY 2023/2024 delivered a solid operating and financial performance, with an acceleration in the signing of new contracts in net terms in H2, as expected, company management said.
For FY 2024/2025, Compass says it is targeting growth in recurring operating profit of close to 10%, based on expected organic business growth of over 7.5%, accompanied by a further improvement in its operating margin.
Following this unsurprising publication, the share was subject to profit-taking on Tuesday morning on the London Stock Exchange, posting the second biggest drop on the FTSE 100 index, down 2.2%.
Note that at last night's closing price, the share was up over 25% YTD.
Copyright (c) 2024 CercleFinance.com. All rights reserved.