Catering giant Compass has reported a surge in sales and profits as more businesses choose to outsource food services in response to complex regulations and allergy risks. The world's largest catering group, employing around 590,000 staff, generated revenues of 25 billion US dollars (£18.4 billion) for the six months to the end of March.
Revenue growth driven by new contracts
This represented a 9% increase compared to the same period last year, at constant currencies, partly driven by a 2.7% rise in prices. Compass said sales were boosted by winning new business contracts worth 4.1 billion dollars (£3 billion) over the period, which was 14% higher than the previous year. Approximately half of these contracts came from clients outsourcing catering for the first time.
CEO comments on market opportunities
Dominic Blakemore, the group's chief executive, stated that the company operates in a “highly attractive” market and is targeting new sub-sectors for growth, including the “AI ecosystem”. He noted, “Clients face increasing complexity, such as regulation, allergens and data-led insights, and these factors are driving demand for outsourcing across all sectors.” Blakemore added that the maximum sales opportunity across the market could reach 600 billion US dollars (£441 billion) by 2035.
Profit and share performance
The company’s operating profit totalled 1.84 million US dollars (£1.35 billion) for the half-year, up 12% on the prior year. Shares in Compass rose by about 2% on Monday morning following the announcement.
Analyst perspectives
Mark Crouch, market analyst for eToro, commented that the new business figure “points to a structural shift rather than a short-term boost, particularly as businesses continue looking for ways to cut costs and improve efficiency”. He added, “The figures also challenge the narrative that hybrid working and advances in AI will materially weaken demand for workplace catering.” However, Crouch cautioned that investors would keep a close eye on inflation risks, particularly if escalating conflict in the Middle East drives another spike in energy and food prices, which could eventually squeeze margins across the sector.
