Compass Group Plc (CPG) is a food and support services company headquartered in Chertsey, Surrey. The company reported its H1 FY19 results on 15th May 2019. The group reported a surge of 8.8 per cent in the statutory revenue for the half-year ended March 31, 2019. The statutory revenue increased to £12.3 billion as compared to £11.3 billion in H1 FY18. However, underlying revenue for the period increased by 6.6 per cent to £12.5 billion from £11.7 billion in H1 of FY2018.
Underlying Operating profit for the period came in at £951 mn as compared with £899 mn in the year-ago period. Although, underlying operating margin remained flat at 7.5 per cent. The underlying earnings per share (EPS) surged to 42.9 pence against 40.3 pence in the year-ago period and rose by 6.5 per cent.
Free Cash Flow in the first half of 2019 climbed by 14 per cent to £530 mn from £465 mn during the same period of the corresponding previous year.
In H1 FY19, the interim dividend stood at 13.1 pence per share, up by 6.5 per cent against the last year data of 12.3 pence per share in H1 FY18.
During the reported period, their North America business handed over a strong performance, with revenue of £7,691 mn against the revenue of £6,706 mn and reported organic growth of 7.9 per cent. Revenue from Europe rose organically by 5.5 per cent to £2,976 mn and revenue from the rest of world (ROW) grew by 3.2 per cent (organic basis) to £1,801 mn.
In the first half of 2019, 61.7 per cent of the group's total revenue came from North America, 23.9 per cent came from Europe, and the remaining 14.4 per cent came from Rest of World.
In H1 of FY19, the group’s total net cash spent on the acquisitions was £370 mn vs £328 mn in the H1 FY18 period. The major acquisition during the period was Lowa based Client Rewards. Compass acquired 100 per cent stake in the Lowa based procurement and supply chain management service company (Client Rewards) for an initial consideration of £163 mn.
Share Price Performance
Daily Price Chart (as on May 15, 2019), before the market close. (Source: Thomson Reuters)
At the time of writing (as on May 15, 2019, at 02:49 PM GMT), shares of CPG were trading 54.5 points or 3.15 per cent at GBX 1,783 against the yesterday’s closing price. In the past one year, shares have touched a 52w high of GBX 1,830.50 and a 52w low of GBX 1,467.50.
At the current trading level, the dividend yield of the company stood at 2.18 per cent. The outstanding market capitalisation of the group stood at around £28.21 bn, which ranks it among the large-cap stocks listed on the London Stock Exchange. On the fundamental front, the company was trading at a trailing twelve months P/E multiple of 21.2x. The company’s stock beta was 0.84, reflecting lower volatility as compared to the benchmark index.
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