Shares in the caterer Compass Group PLC (LSE:LON:CPG) rose in early trade after it upgraded its revenue forecast and maintained its full-year profit margin target.
While it said the exit margin would ‘moderate’ slightly to 6% from its current 7%, the group said this was the result of a step-change in sales, which will now grow at 35% rather than 30%.
“With a clear strategy, operational scale, and market leading offer, Compass is very well positioned to capitalise on the increase in outsourcing opportunities,” investors were told.
“Longer term, we expect revenue and profit growth above historical rates, returning margin to pre-pandemic levels, and rewarding shareholders with further returns.”
In Compass’ third quarter, organic revenue growth increased 43.4% from 37.9% in the financial first half. Underlying sales are now at 109% of their pre-Covid levels.
“New business growth continued to accelerate, benefiting from an increase in first-time outsourcing due to ongoing operational challenges and heightened inflation,” it added.
Compass, which has catering contracts in 44 countries, was responsible for the food and drink at the recent Wimbledon tennis tournament.
The shares opened 2.44% higher at 1,890p.