British catering group Compass reported an 11.7% jump in first-quarter organic revenue and said like-for-like volume, or the number of meals served, was better than expected due to more Christmas events and people returning to offices.
The world's biggest catering company, whose Levy Restaurants brand is catering the 2024 Super Bowl at the Allegiant Stadium in Las Vegas, kept its 2024 outlook unchanged, with underlying operating profit growth expected to rise to near 13%.
Compass has benefited from increasing office occupancy and a shift towards contract catering in the last few years as self-operators turn to firms such as the Chertsey-based company for their canteen operations amid high food and labour costs.
"Outsourcing trends and volumes were strong despite continued inflationary pressures and some macroeconomic uncertainty," CEO Dominic Blakemore said in a statement.
Compass provides catering services to offices, universities and sports stadiums, and its business and industry division, which brings in more than a third of its revenue, caters to companies such as Microsoft and Shell.
Acquisitions
Compass, which competes with the likes of Sodexo and Elior, has been ramping up acquisitions as it doubles down on core markets by growing organically and through bolt-on deals such as its purchase of CH&Co in the UK last month and Germany's Hofmann in November.
It has exited some non-core markets too, including a small operation in China most recently, it noted.
"Portfolio structure continues to improve in our view, with the new disposal of operations in China reducing operational complexity further," Citi analyst Leo Carrington wrote in a note.
North America, its largest region, clocked an 11.3% growth in organic revenue for the quarter.
Its Levy brand will serve food and drinks at the Super Bowl championship game of the National Football League this weekend, offering such popular items as hot dogs and nachos in concession stands and shrimp cocktail towers in VIP clubs and suites.
