# Contract caterer Compass expects 2023 profit growth to top 20%
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-21
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Compass Group predicts 20% profit growth in 2023
Meta Description: Discover how global caterer Compass Group is exceeding expectations, with profit growth predictions of over 20% for 2023 and margins above 6.5%.
URL: https://financedigest.com/contract-caterer-compass-expects-2023-profit-growth-to-top-20html

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(Reuters) – Contract caterer Compass Group on Monday forecast its profit growth to be more than 20% in 2023 and margins to be above 6.5%, after reporting a surge in financial year 2022 profit buoyed by new business wins and reopening of economies.

The world’s largest catering group more than doubled its dividend to 31.5 pence for the year ended Sept. 30 and announced a new share buyback of 250 million pounds ($295.25 million) after revenue and profit beat market expectations.

Like other businesses, Compass has been grappling with higher costs of food and labour, and has been tackling soaring [inflation by changing ingredients such switching from sunflower oil](https://www.financedigest.com/oil-jumps-on-lower-than-expected-us-inflation-data.html "Oil jumps on lower-than-expected US inflation data") to rapeseed oil in the UK and reducing the number of options its menu offers, among other things, to cut costs.

A challenging economic environment and fears of a recession has also meant that more [companies are outsourcing their canteen needs](https://www.financedigest.com/anyone-can-write-assignment-need-people-able-apply-new-skills-workplace-says-top-investment-management-company.html "“Anyone can write an assignment, but we need people to be able to apply their new skills to the workplace,” says top investment management company") to cut costs, helping Compass gain more new businesses and retain clients.

Compass, which serves office workers, university students, patients and seniors in old age homes across 40 countries, said adjusted operating [profit soared nearly 88% to 1.59 billion pounds in the year](https://www.financedigest.com/crop-merchant-louis-dreyfus-gets-profit-boost-in-volatile-year.html "Crop merchant Louis Dreyfus gets profit boost in volatile year") ended Sept. 30.

That beat the company-compiled analysts’ estimate of 1.54 [billion pounds](https://www.financedigest.com/shell-to-evaluate-25-billion-pound-british-investments-after-windfall-tax.html "Shell to ‘evaluate’ 25 billion pound British investments after windfall tax").

Adjusted [operating margin](https://www.financedigest.com/ubisoft-vows-to-get-back-to-operating-margin-above-20-in-medium-term.html "Ubisoft vows to get back to operating margin above 20% in medium term") was at 6.2%, a tad higher than the company-compiled consensus of 6.1%.

Constant-currency underlying operating profit growth is [expected to be above 20% for financial year](https://www.financedigest.com/philips-expects-to-reach-recall-settlements-this-year.html "Philips expects to reach recall settlements this year") 2023, Compass said.

Underlying revenue for the year rose about 38% to 25.8 billion pounds, surpassing [pre-pandemic levels](https://www.financedigest.com/fraport-sees-2023-passenger-traffic-at-80-90-of-pre-pandemic-levels.html "Fraport sees 2023 passenger traffic at 80-90% of pre-pandemic levels"), and analysts average forecast of 25.1 billion pounds.

($1 = 0.8467 pounds)

(Reporting by Yadarisa Shabong; Editing by Savio D’Souza and Rashmi Aich)


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