Compass group holds steady on outlook as first-half profit tops expectations
London, 14 may 2025 – Compass group, the world’s largest catering services provider, maintained its annual profit and revenue forecasts on wednesday after reporting first-half operating profit ahead of market expectations. The British food services giant attributed the performance to robust new business wins, even as broader sector concerns weighed on its share price in recent months.
For the six months ended 31 march, Compass posted an underlying operating profit of $1.63 billion (£1.28 billion), marking an 11.6% increase compared with the same period a year earlier. This result slightly surpassed analysts’ expectations of $1.61 billion, based on a consensus compiled by the company.
Despite the positive outcome, Compass did not upgrade its full-year guidance, a move that some investors had anticipated following a solid start to the year. The absence of a guidance lift, first signalled in February, has been a source of caution for markets, with the company’s shares experiencing downward pressure amid concerns about the sector’s growth trajectory, particularly in North America.
In March, rival French caterer Sodexo slashed its full-year forecast citing weaker growth in its North American operations — a key market for both Sodexo and Compass. This announcement sent ripples through the catering industry and compounded the cautious sentiment surrounding Compass’ performance.
Nonetheless, Compass remains confident in its outlook for the financial year, banking on strong demand for outsourced food services across sectors such as education, healthcare, sports, and business. The company’s organic revenue growth stood at 8.5% during the first half, in line with market expectations, reflecting steady momentum in new contract wins and client retention.
Operating profit margin for the period came in at 7.2%, also matching analysts’ forecasts and demonstrating Compass’ ability to maintain profitability amid cost inflation and economic uncertainty in key markets.
Dominic Blakemore, Group Chief Executive of Compass, highlighted the company’s resilience and disciplined approach to growth. “We are pleased with our first-half performance, which reflects the strength of our business model and the consistent execution of our strategy. New business wins have remained robust, and we continue to see significant opportunities in our markets,” he said in a statement.
In a show of confidence, the board declared an interim dividend increase of 9.2%, taking the payout to 22.6 cents per share for the first half. However, Compass did not announce any additional share buybacks, focusing instead on organic growth and investment in operational efficiencies.
Investors and analysts will now closely watch Compass’ second-half performance, particularly its exposure to the North American market, which accounts for a significant share of its revenue and profit. While the company has so far managed to sidestep the pressures that forced Sodexo’s downgrade, questions linger over the sustainability of growth in the region.
Some analysts have noted that while Compass’ performance has been broadly reassuring, the lack of a guidance upgrade or fresh capital returns may limit upside for the shares in the near term.
Compass’ shares opened slightly higher in London trading on Wednesday, reflecting the market’s cautiously optimistic reception to the results. However, the stock remains down around 7% from its February peak, weighed down by broader sector concerns and investor caution over North American trends.
Looking ahead, Compass reiterated its full-year expectations of mid-to-high single-digit organic revenue growth and continued margin progression, as it focuses on driving efficiencies and capitalising on the ongoing demand for outsourced food services.
The company also reaffirmed its long-term strategy of sustainable, profitable growth, underpinned by innovation in food services, digital transformation, and expanding its presence in underpenetrated markets.
Despite the cautious backdrop, Compass’ first-half beat underscores the resilience of its global operations and its ability to navigate sector headwinds while delivering steady returns to shareholders.
