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Compass Group (CPG)

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idpickering
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Compass Group (CPG)

#221686

Postby idpickering » May 15th, 2019, 7:30 am


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Re: Compass Group (CPG)

#239069

Postby idpickering » July 25th, 2019, 7:03 am


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Re: Compass Group (CPG)

#267210

Postby idpickering » November 26th, 2019, 7:07 am

Full year results announcement for the year ended 30 September 2019

Strong organic revenue growth of 6.4%, above target range of 4-6%

· Excellent performance in North America with broad based organic revenue growth of 7.7%

· Europe growth of 4.1% with strong performances in UK Defence and Sports & Leisure offsetting Business & Industry volume weakness

· Rest of World growth of 4.3% driven by strong performances in Turkey, India and Spanish-speaking LATAM

Operating profit of £1.9 billion; up £84 million or 4.7% on constant currency basis

· Operating margin was maintained at 7.4%

Strong balance sheet, earnings and dividend growth

· Free cash flow increase of 9.3% to £1.2 billion resulting in net debt to EBITDA ratio of 1.3x

· Full year dividend up 6.1% in line with constant currency earnings per share

Executing our strategy and focusing on our core food business

· Continued to strengthen and simplify our portfolio. Completed several acquisitions and disposals for net cash cost of £377 million, and agreed the proposed acquisition of Fazer Food Services in the Nordics for €475 million

· Good momentum behind our strategic priorities of Performance, People and Purpose

Positioning for the future

· The outlook for the Group remains strong. We expect 2020 organic growth around the mid-point of our 4-6% guidance range whilst maintaining our strong margin

· Against the backdrop of a deteriorating macro environment in Europe we are taking prompt action to adjust our cost base. These actions, which have also been extended to certain Rest of World markets, result in non-underlying cash charges of around £160 million over 2019 and 2020, and a non-cash charge of £140 million

And later;


6 DIVIDENDS

A final dividend in respect of 2019 of 26.9 pence per share, £427 million in aggregate1, has been proposed, giving a total dividend in respect of 2019 of 40.0 pence per share (2018: 37.7 pence per share). The proposed final dividend is subject to approval by shareholders at the Annual General Meeting to be held on 6 February 2020 and has not been included as a liability in these financial statements.



https://www.investegate.co.uk/compass-g ... 00076079U/

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Re: Compass Group (CPG)

#267222

Postby idpickering » November 26th, 2019, 8:05 am

The results haven't gone down well it seems, with the share being down over 4% on market opening.

Ian.

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Re: Compass Group (CPG)

#267251

Postby tjh290633 » November 26th, 2019, 9:50 am

idpickering wrote:The results haven't gone down well it seems, with the share being down over 4% on market opening.

Ian.

This appears to be down to an apparent reduction in profit, because of an accounting change.

loc cit: Statutory results

· Statutory operating profit decreased by 5.4% as a result of the impact of the cost action programme offset by higher profits and foreign exchange benefit. Statutory earnings per share decreased by 1.8%


This dealt with thoroughly a long way down the report. Search for "reconciliation" and find Note s 8 and 10.

TJH

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Re: Compass Group (CPG)

#267319

Postby Bouleversee » November 26th, 2019, 12:57 pm

So is that a one-off or will it have an effect every year? I don't understand why the s.p. should be down over 6% on this account but I suppose the uncertain future on account of Brexit etc. doesn't help. Pity, as they had been doing rather well.

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Re: Compass Group (CPG)

#267325

Postby kempiejon » November 26th, 2019, 1:11 pm

Bouleversee wrote:So is that a one-off or will it have an effect every year? I don't understand why the s.p. should be down over 6% on this account but I suppose the uncertain future on account of Brexit etc. doesn't help. Pity, as they had been doing rather well.


They have been doing rather well, let's hope this is just a blip, double digit divided growth for a decade odd and more than a tripling of share price to boot.

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Re: Compass Group (CPG)

#267341

Postby tjh290633 » November 26th, 2019, 1:48 pm

Bouleversee wrote:So is that a one-off or will it have an effect every year? I don't understand why the s.p. should be down over 6% on this account but I suppose the uncertain future on account of Brexit etc. doesn't help. Pity, as they had been doing rather well.

It is a one off as they have changed their accounting method. The share price fall is ridiculous, based on a headline comment. Read note 10 and the footnotes which follow it. They explain why there have been changes and show their working, as they should. I doubt that whoever wrote the critical article ever got past the first page.

TJH

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Re: Compass Group (CPG)

#267346

Postby Bouleversee » November 26th, 2019, 1:57 pm

Sorry, no time Terry. Happy to take your word for it. I tried scrolling down in search of reconciliation but gave up after umpteen pages.

One of my better holdings, anyway, so quite happy to hang on and hope for the best.

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Re: Compass Group (CPG)

#267356

Postby tjh290633 » November 26th, 2019, 2:20 pm

Bouleversee wrote:Sorry, no time Terry. Happy to take your word for it. I tried scrolling down in search of reconciliation but gave up after umpteen pages.

One of my better holdings, anyway, so quite happy to hang on and hope for the best.

I found it by searching for "reconciliation", using CTRL-F, Lorna. It didn't take long. Should you find it, look at the columns of adjustments and cross refer to the following footnotes.

TJH

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Re: Compass Group (CPG)

#268229

Postby Deev8 » November 30th, 2019, 1:17 am

And the difficult to find payment date for the final dividend of 26.9 pence is 24th Feb 2020.

Dave

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Re: Compass Group (CPG)

#268231

Postby PinkDalek » November 30th, 2019, 1:54 am

Deev8 wrote:And the difficult to find payment date for the final dividend of 26.9 pence is 24th Feb 2020.


For another time, if you don't know the method, go to the RNS linked by idpickering https://www.investegate.co.uk/compass-group-plc--cpg-/rns/full-year-results/201911260700076079U/.

When there press Ctrl&F simultaneously. That should bring up a search box. Type in Dividend and that should show how many times Dividend is mentioned in the RNS. The dividend payment date should be item 8.

If you already knew this, it might be useful for those who don't.

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Re: Compass Group (CPG)

#271268

Postby TheMotorcycleBoy » December 15th, 2019, 1:25 pm

tjh290633 wrote:
Bouleversee wrote:So is that a one-off or will it have an effect every year? I don't understand why the s.p. should be down over 6% on this account but I suppose the uncertain future on account of Brexit etc. doesn't help. Pity, as they had been doing rather well.

It is a one off as they have changed their accounting method. The share price fall is ridiculous, based on a headline comment. Read note 10 and the footnotes which follow it. They explain why there have been changes and show their working, as they should. I doubt that whoever wrote the critical article ever got past the first page.

TJH

Terry,

I take it you section 10 i.e.
10 STATUTORY AND UNDERLYING RESULTS

(Regards the tiny font "Notes" it seems each section has it's own unique set of foot notes).

Regards the change in accounting method, it is IFRS 15 that one needs to follow in the RNS. And it's adoption actually increases EBIT. This is from the RNS:

Adoption of new accounting standards
The Group has applied the new accounting standards IFRS 15 'Revenue from contracts with customers' and IFRS 9 'Financial instruments' in the current year. Comparatives for 2018 have been restated to reflect the impact of IFRS 15, resulting in a net increase in operating profit and decrease in revenue of less than 1%. The adoption of IFRS 9 has not had a material impact and the Group has adjusted opening retained earnings to reflect an additional provision for impairment of trade receivables using the expected credit loss model.

If you continue to search you'll come across this:

2 CHANGES IN ACCOUNTING POLICIES
IFRS 15 'Revenue from contracts with customers' - impact of the adoption
The impact of the adoption of IFRS 15 'Revenue from contracts with customers' on the Group's consolidated financial statements is included below. IFRS 15 has been adopted retrospectively and comparatives for the year ended 30 September 2018 have been restated. The following tables show the impact of these changes on each of the Group's primary statement line items affected. Where practical, line items which are not impacted by the restatement have been aggregated within the relevant sub-totals. The impact of the new standard is also explained in more detail within the footnotes that follow the tables.

There then follows a table comparing two GAAP (statutory) Consolidated Income Statements both for Sept 2018, with one of them being restated using IFRS 15. IFRS lowers reported revenue and costs very slightly, and it actually lifts statutory reported EBIT by 0.17%.

HTH
Matt

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Re: Compass Group (CPG)

#271284

Postby TheMotorcycleBoy » December 15th, 2019, 3:04 pm

tjh290633 wrote:
idpickering wrote:The results haven't gone down well it seems, with the share being down over 4% on market opening.

Ian.

This appears to be down to an apparent reduction in profit, because of an accounting change.

loc cit: Statutory results

· Statutory operating profit decreased by 5.4% as a result of the impact of the cost action programme offset by higher profits and foreign exchange benefit. Statutory earnings per share decreased by 1.8%


This dealt with thoroughly a long way down the report. Search for "reconciliation" and find Note s 8 and 10.

TJH

Terry, I believe the "cost action programme" is not an accounting change. And no accounting change accounts for the EBIT fall. The EBIT fall is due to decline in their European sector. The fall in the SP (possibly oversold?) was due to this EBIT fall.

Search for Taking appropriate cost actions in
https://www.investegate.co.uk/compass-g ... 00076079U/

We are seeing good performances across most of the Group, however we are not immune to macroeconomic challenges. Although our European business is in good shape, delivering organic revenue growth of 4.1%, as previously indicated we have been seeing pressures in the region, particularly in some of our largest markets. These pressures have been increasing during the year, impacting volumes in our Business & Industry sector, and consequently are having a significant impact on our European margin. Consumer confidence continues to decline and a number of key clients, notably in manufacturing, automotive and financial services, have reduced their headcount in recent months.

Given this trading backdrop, we are taking prompt action to ensure we have the right sized labour model for the future. This will protect the profitability of the business and further strengthen our strong operational position, enabling us to continue to capitalise on the attractive growth opportunities we see in Europe. Although the vast majority of these actions are focused on Europe, they have also been extended to a limited number of countries in Rest of World.

These cost actions will result in a total non-underlying charge for the Group of around £300 million, of which £190 million has been incurred in FY19, with the remainder expected to be incurred in FY20. Approximately £160 million of the total charge is cash, with £29 million having been spent in FY19. This mostly relates to removing some MAP 4 (in unit labour) and some MAP 5 (overhead) costs, and has around a two year payback. The FY19 charge also includes a one-off non-cash charge of £120 million in respect of a change in the expected profitability of some of those contracts that have been affected by the recent deterioration in business and consumer confidence and that are now considered to be structurally loss making and where asset impairments have been taken. The run-rate for annual savings resulting from the cost actions is expected to be c. £90 million as we exit this year and have already been factored into the 2020 guidance.


Cost actions = redundancies payouts and disposing of unrequired facilities (cookers, fridges and so on).

Another version of the same story:

https://www.thisismoney.co.uk/money/mar ... mpass.html
Compass has set aside £300m for writedowns in 2019 and 2020. Around half of this will fund a restructuring, which will include a redundancy plan for up to 0.5 per cent of its 600,000 employees worldwide – equal to around 3,000 roles.

So finally. Contraction of some areas of European markets, mean redundancies and impairments, means higher costs. Fortunately their top line was strong, so EBIT hit was small. That's why the SP fell on the release of the RNS in last week of November.

Matt

idpickering
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Re: Compass Group (CPG)

#282613

Postby idpickering » February 6th, 2020, 7:04 am

AGM and Trading Update



Compass' organic revenue for the three months to 31 December 2019 grew by 5.3%, driven by strong levels of new business wins and good retention rates, particularly in North America.

The cost action programme, which was announced in November, is progressing as expected and the benefits are offsetting the anticipated impact of lower Business & Industry volumes in Europe.


https://www.investegate.co.uk/compass-g ... 00071269C/

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Re: Compass Group (CPG)

#291459

Postby idpickering » March 17th, 2020, 7:21 am

Coronavirus (COVID-19) Trading Update

Compass Group provides a trading update in light of the rapidly changing situation regarding COVID-19. Our priority remains the health and safety of our employees, clients and consumers.

Compass' organic revenue growth for the five months ending 29 February 2020 was 6% as measures to contain the virus in our Asia Pacific region did not materially impact our business. Our operating margin during that five month period increased by around 10bps1 with the benefits from the restructuring programme in Europe coming through strongly.


https://www.investegate.co.uk/compass-g ... 00033660G/

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Re: Compass Group (CPG)

#291470

Postby Wizard » March 17th, 2020, 8:04 am

idpickering wrote:Coronavirus (COVID-19) Trading Update

Compass Group provides a trading update in light of the rapidly changing situation regarding COVID-19. Our priority remains the health and safety of our employees, clients and consumers.

Compass' organic revenue growth for the five months ending 29 February 2020 was 6% as measures to contain the virus in our Asia Pacific region did not materially impact our business. Our operating margin during that five month period increased by around 10bps1 with the benefits from the restructuring programme in Europe coming through strongly.


https://www.investegate.co.uk/compass-g ... 00033660G/

That worked, only share that opened down this morning.

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Re: Compass Group (CPG)

#291683

Postby monabri » March 17th, 2020, 4:27 pm

The intraday graph indicates that after a share sell off, the share price picked up towards the end of day.

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Re: Compass Group (CPG)

#291706

Postby Bouleversee » March 17th, 2020, 5:06 pm

50% down on its high for the year, as are several of my most successful holdings. So much for letting one's winners run. My only consolation is that I can stop reproaching myself for not getting around to investing most of last year's dividends.

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Re: Compass Group (CPG)

#302587

Postby idpickering » April 23rd, 2020, 7:55 am

COVID-19 Update

Including this bit, sadly for holders;

Dividend

We recognise the importance of a dividend to our shareholders. However, we need to balance this with the exceptional circumstances that the Covid-19 pandemic represents. As a result, the Board has decided not to recommend an interim or a final dividend for the year ending 30 September 2020. The Board will keep future dividends under review and will restart payments when it is appropriate to do so.


https://www.investegate.co.uk/compass-g ... 00045717K/

Also on HYP Practical.


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