Compass: forecasts raised, but margin a little disappointing
(CercleFinance.com) - On Wednesday, Compass reported half-year results slightly ahead of expectations, and raised its growth forecast for the full year.
But the operating margin generated by the world's leading contract caterer seemed to disappoint some investors, causing its shares to fall sharply on the London Stock Exchange.
The British group, which supplies canteens to companies, schools and military bases, reported this morning a current operating profit up by more than 18% to £1.47 billion for the six months to the end of March.
Analysts were, on average, targeting a profit of £1.46 billion.
Half-year sales totalled £20.9 billion, representing organic growth of 11.2%, against a consensus target of 10.7%.
Compass raised its guidance for the full year to September, now expecting organic growth of around 10%, compared with a previous forecast at the upper end of the 5%-10% range.
RBC analysts noted, however, that this solid performance was somewhat overshadowed by a slightly disappointing operating margin of 7.1%, compared with 6.6% a year earlier.
As a result, Compass shares fell by more than 3% in early trading on Wednesday, marking the second biggest drop on the London FTSE 100 index and one of the biggest declines on the STOXX 600.
The share is still up by almost 5% since the start of the year.
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