Compass built on its momentum from the first quarter, with organic revenue growth of 25% in 1H23, with the trends of returning workers and first-time outsourcing continuing. As a result, it has nudged up guidance for the full year and announced an additional £750m share buyback (bringing the total to £1.5bn). We give our already top of the range estimates a marginal uplift, resulting in an increase in TP to 2150p (from 2010p). While we see less scope for future upgrades following the recovery ph...
Compass enjoyed a strong Q1 with organic revenue of 24% as volumes continued to rebound as workers returned to offices. However, comparatives become more challenging as the year progresses hence guidance remains unchanged. This is for organic growth of c15% and operating profit growth of c20% (1H weighted), with margins above 6.5% (2H weighted). We leave our forecasts unchanged and see less scope for upgrades post the recovery phase. Our TP implies an EV/EBITDA multiple of 12.5x, in the middle o...
We view inflation as a catalyst to accelerate outsourcing and bring people back to office. In this context, Facility Management companies have proven pricing power and they have demonstrated their capacity in cutting costs. Based on our analysis, we confirm our positive outlook for guidance on FY 2022 margins and a potential improvement in 2023. We continue to prioritize Compass, ISS and Elis in our coverage
All players in facility management sector published better than expected results and many of them upgraded their guidance showing that Inflation has driven a stronger than expected top line organic growth while margins remained in line with expectations. Historically, market leaders were resilient with steady organic growth and relatively stable margin during recessions and crises since 2001. Since inflation is here to stay, we have revised slightly upwards our top line estimations for all stock...
Business Services What does the “new normal” post-Covid look like for business services? As office life transitions to more flexible solutions, the sector needs to adapt. We believe Compass and ISS can reap the benefits from being able to reshape. Both are upgraded to Buy. We remain negative on Elior for structural reasons and confirm our neutral opinion on Sodexo. • Adapting to the new ecosystem in the workplace remains vital: Clearly, working from home was a positive experience for many employ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Among the world’s largest employers (Compass Group is the world’s eighth largest employer), serving meals to millions of consumers every day and providing health maintenance and monitoring in hundreds of establishments, the ESG commitments of FM services providers are under particular scrutiny. Particularly conscious of their responsibility, the main players in the sector are widely committed to ensuring the well-being and safety of their employees and consumers while respecting environmental c...
COMPASS GROUP - NEUTRAL | 1060p vs. 1900p (-5%) Feedback CC: So many uncertainties H1 results reflecting the first effects of Covid 19 Drastic cost control measures to reduce cash burn Substantial but much-needed cash A surprise capital increase that raises questions Our FV moves to 1,060p
COMPASS GROUP - NEUTRAL | 1550p(-2%) FY results: Sustained results but broadly in line with expectation Slightly better organic revenue growth with EBIT margin in line Sustain cash generation and EPS and Dividend growth of 12.5% Confident on outlook
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