Vending

Compass Group improves 2021 earnings on revenue decline

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November 23, 2021

Compass Group PLC, which owns Compass Group North America and Canteen Vending Service in the U.S., reported progress in recovering from the pandemic's impact for the full year of 2021, according to an earnings report.

The company boosted its operating profit despite a revenue decline.

Revenue in 2021 declined by 6.3% from £19.2 billion ($25.64 billion) in 2020 to £18.1 billion ($24.18 billion) on an organic basis as the pandemic continued to impact revenues. All business sectors reported revenue declines in 2021: Business and industry was down 21%, education was down 3.7%, Healthcare and senior living were down 6.9%, sports and leisure, were down 6.7% and defense and offshore and remote were down 8.3%.

Operating profit increased 55.4% from £522 million ($697.21 million) to £811 ($1.08 billion), while earnings per share rose from 17.1 pence (22.9 cents) to 29.5 pence (39.5 cents).

Underlying revenue recovered to 88% of 2019 revenue by Q4 2021. Full year underlying revenue was 77% of 2019.

Healthcare and senior living, defense, offshore and remote sectors performed well above pre-pandemic volumes, with strong recovery in education and sports and leisure by Q4.

Shares traded at $20.74 today against a 52-week range of $17.87-$23.30.

"Our strong financial recovery in 2021, including record new business wins and client retention, is a credit to our teams' exceptional resilience, dedication and expertise in extraordinary circumstances," Domninic Blakemore, group chief executive, said in the press release. "We are pleased to be reinstating the dividend reflecting our strong cash flow and increasing confidence in the group's performance."

The company expects 2022 organic revenue growth to be 20%-25%.

For an update on how the coronavirus pandemic has affected convenience services, click here.