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Full year results announcement for the year ended 30 September 2021

  Underlying1 results Statutory results
2021 2020 Change 2021 20202 Change
Revenue £18.1bn £19.2bn2 (6.3)%3 £17.9bn £19.9bn (10.2)%
Operating profit £811m £522m2 (55.4)%2 £545m £294m 85.4%
Operating margin 4.5% 2.9% 160bps 3.0% 1.5% 150bps
Earnings per share 29.5p 17.1p2 72.5%2 20.0p 8.0p 150%
Free cash flow £660m £213m 209.9%      
Operating cash flow       £1,171m £845m 38.6%
Annual dividend per share 14p     14p    

1. Reconciliation of statutory to underlying results can be found in notes 2 (segmental analysis), 5 (earnings per share) and 13 (non-GAAP measures) of the consolidated financial statements.

2. Measured on a constant currency basis.

3. Organic revenue change.

Focused on growth following a year of strong recovery

Performance summary

  • Underlying revenue recovered to 88% of 2019 revenue by Q4. FY underlying revenue 77% of 2019
  • Underlying margin improved to 5.8% in Q4. FY underlying margin of 4.5%
  • Strong FY operating cash flow of £1 billion whilst maintaining gross capex at 3.6% of underlying revenue. Reduced leverage ratio to 1.6x
  • Reinstating the dividend with a payout policy of c.50% of underlying earnings

Operational highlights

  • Healthcare & Senior Living and Defence, Offshore & Remote sectors performed well above pre-pandemic volumes, with strong recovery in Education and Sports & Leisure by Q4
  • Record new business wins of £2.1 billion, with around half from first time outsourcing and client retention of 95.4%
  • Announced a global commitment to deliver net zero by 2050, including validated Science Based Targets to 2030

Strategy

  • Focused on growth:
    • Significant structural opportunities, especially in first time outsourcing
    • Enabled by our strategic priorities: evolution of our operating model, innovation and digital, investing in capex and M&A and sustainability commitments

Outlook

  • FY22 organic revenue growth expected to be 20%-25%
  • FY22 underlying operating margin anticipated to be over 6%, with an exit rate of c.7%
  • Progress expected to be weighted towards the second half of the year due to mobilisation costs and inflationary pressures during H1

Statutory results

  • Statutory revenue decreased by 10.2% due to the pandemic’s continuing impact on our operations
  • Statutory operating profit increased by 85.4% to £545 million reflecting actions taken to control the controllable, including resizing the cost base and improved cost control

Dominic Blakemore, Group Chief Executive, said:

“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. We are pleased to be reinstating the dividend reflecting our strong cash flow and increasing confidence in the Group’s performance.

Looking ahead we are now focused on growth, driven by encouraging market trends and our ability to provide more bespoke, digital and sustainable solutions that meet the evolving needs of clients in a post-pandemic world. The tailwinds from first time outsourcing continue and, combined with our differentiated operating model and investment opportunities, we are in a strong position for growth.

In the short term, we expect FY22 organic revenue growth to be 20%-25%. Full year underlying margin is anticipated to be over 6%. With ongoing mobilisation costs and inflationary pressure, further improvement will be weighted towards the second half of the year as we return to underlying margin of around 7% by year end.

As we emerge from the pandemic, our strategic focus is on sustained growth for the future, to enhance our competitive advantages and further strengthen our position as an industry leader in food services. We are increasingly excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels, and rewarding shareholders with further returns.”

Results presentation today

A recording of the results presentation for investors and analysts will be available on the Company’s website today, Tuesday 23 November 2021, at 7.00 a.m.. There will be a question and answer session at 9.00 a.m., accessible via the Company’s website, www.compass-group.com, and you will be able to participate by dialing:

Please connect to the call at least 10-15 minutes prior to the start time.

UK Toll Number:
+44 (0) 33 0551 0200

UK Toll-Free Number:
0808 109 0700

US Toll Number:
+1 212 999 6659

US Toll-Free Number:
1 866 966 5335

Participant PIN Code: Compass

Financial calendar

Ex-dividend date for 2021 final dividend - 20 January 2022
Record date for 2021 final dividend -
21 January 2022
Q1 Trading Update / Annual General Meeting - 3 February 2022
Last day for DRIP elections - 7 February 2022
2021 final dividend date for payment -28 February 2022
Half year results - 11 May 2022

Enquiries

Investors

Agatha Donnelly, Helen Javanshiri & Simon Bielecki
+44 1932 573 000

Press

Giles Robinson, Compass Group PLC
+44 1932 963 486

Tim Danaher, Brunswick
+44 207 404 5959