LONDON May 14 Compass, the world's
biggest catering firm, said it would return 1 billion pounds
($1.68 billion) to shareholders through a special dividend as
strong business wins in North America helped push first-half
profit up 5.7 percent.
The British group, which employs over 500,000 people to feed
office workers, soldiers and school children in some 50
countries, said on Wednesday adjusted pretax profit for the six
months to March 31 rose to 608 million pounds versus 604 million
forecast by analysts.
A potential payout at Compass had been flagged by some
analysts due to the firm's strong cash generation and preference
for organic growth alongside small bolt-on acquisitions.
The firm, which is already in the middle of a 500 million
pound share buyback programme, said the move would put net debt
to EBITDA at a ratio of around 1.5 times, supporting its policy
of maintaining strong investment grade ratings.
On top of the 1 billion pound payout, which takes returns to
shareholders since 2006 to 6 billion pounds, Compass also raised
its interim dividend by 10 percent to 8.8 pence per share.
Chief Executive Richard Cousins said its full-year
expectations remained unchanged and that an encouraging pipeline
of new contracts left it confident of a good second half.
"Looking forward, the outsourcing proposition remains
compelling and I'm positive about the opportunities for further
revenue and margin progression," Cousins said in a statement.
First-half revenue grew 4.2 percent to 8.7 billion pounds,
led by North America, its largest market worth almost half of
group turnover, where it signed new deals with universities,
hospitals and firms such as L'Oreal, DreamWorks and Nomura.
Revenue in its smaller Fast Growing & Emerging markets
region also grew strongly, with demand in Brazil, Turkey and
China offsetting slowing sales in Australia's resources sector.
The group said it had also seen signs of improving economic
conditions in Japan and Europe, where it has exited weak
contracts and cut costs.
Compass shares were up 4.7 percent to 1027 pence at 0703
GMT. They closed at 980.5 pence on Tuesday, valuing the firm at
17.5 billion pounds.
($1 = 0.5939 British Pounds)
(Reporting by Neil Maidment; editing by Kate Holton and Jason