Compass Group – Pointing In The Right Direction

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Compass Group – Pointing In The Right Direction
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Compass Group plc (LON:CPG)’s fourth quarter revenue was better than expected, reaching about 86% of pre-pandemic levels. The improvement was led by Sports & Leisure, as more people attended outdoor sports. Healthcare and Defence, Offshore & Remote are all trading ahead of 2019 levels.

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Underlying operating margins are expected to be at the mid-point of the 5.5% - 6.0% guidance range in the fourth quarter, and 4.4% for the full year.

The group “remains cautious” about recovery in the Business & Industry division, but is confident of returning to a group operating margin of 7% before reaching pre-pandemic volumes. More detailed results and guidance are expected on 23 November 2021.

A Look At Compass Group's Financials

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown:

"Compass Group is pointing in the right direction. The contract caterer has benefitted as more of us have ventured out to watch live sport, while more resilient divisions including feeding the defence industry have held up remarkably well. The bigger question now turns to the Business & Industry division. Office occupancies and schooling remain disrupted, and to some degree these changes will be permanent.

A dogged cost saving schedule and sticky demand in other areas means Compass’ margins are expected to return to sturdier levels, but exactly what the shape of full recovery’s going to look like is a bit harder to map."


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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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