Catering giant Compass has cheered a boost in sales and profits as more businesses opt to outsource food services in the face of complex regulation and the risk of allergies.
The business, which is the world’s biggest catering group with around 590,000 staff, generated revenues of 25 billion US dollars (£18.4 billion) for the six months to the end of March.
This was 9% higher than the same period a year before, at constant currencies, and was partly driven by a 2.7% increase in prices.
Compass said sales were boosted by it winning new business contracts worth 4.1 billion dollars (£3 billion) over the period, which was 14% higher than the previous year, with around half coming from clients who were outsourcing catering for the first time.
Dominic Blakemore, the group’s chief executive, said the company was operating in a “highly attractive” market and it was targeting new sub-sectors for growth and tapping into the “AI ecosystem”.
“Clients face increasing complexity, such as regulation, allergens and data-led insights, and these factors are driving demand for outsourcing across all sectors,” he said.
The maximum sales opportunity across the market could reach 600 billion US dollars (£441 billion) by 2035, the boss said.
“Today’s results demonstrate consistent execution and the strength of our business model as our services become increasingly integral to our clients’ operations,” Mr Blakemore added.
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 were up by about 2% on Monday morning.
Mark Crouch, market analyst for eToro, said 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”.
“The figures also challenge the narrative that hybrid working and advances in AI will materially weaken demand for workplace catering,” he added.
“However, investors will still 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.”
