Tear Sheet: Compass Group PLC

The company delivered solid organic growth in the first nine months of fiscal year 2023 (ended June 30, 2023). Organic revenue increased by 21% on the back of new business growth, higher pricing, and higher volumes. This, in turn, will drive moderate improvements in margins and free operating cash flow. That said, we assume higher capital expenditure will support growth, in the range of 3% to 3.5% of revenues. Nevertheless, we expect Compass will generate robust free cash flow after lease payment of more than £1 billion over the next 12-18 months. Compass completed share repurchases of £250 million of the £750 million buyback program and spent £272 million on acquisitions and disposals. Given the robust revenue growth and improvements

...August 9, 2023 Compass Group PLC's (Compass) positive trading momentum will continue through to 2024. The company delivered solid organic growth in the first nine months of fiscal year 2023 (ended June 30, 2023). Organic revenue increased by 21% on the back of new business growth, higher pricing, and higher volumes. Strong new wins, driven by the strong outsourcing market and higher pricing in an inflationary environment, continue to bolster growth. This, in turn, will drive moderate improvements in margins and free operating cash flow. That said, we assume higher capital expenditure will support growth, in the range of 3% to 3.5% of revenues. Nevertheless, we expect Compass will generate robust free cash flow after lease payment of more than ú1 billion over the next 12-18 months. The rating is underpinned by our view of Compass' financial policy. Compass completed share repurchases of ú250 million of the ú750 million buyback program and spent ú272 million on acquisitions and disposals....

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