UK's Compass strikes its biggest-ever deal with $1.8 bln Vermaat acquisition
Compass, the world's largest catering group, also raised its annual profit forecast after reporting revenue growth of 8.6% for the third quarter ended June 30, on strong demand across its markets, including its largest market of North America.
Compass shares soared 8.8% in early trade.
The company's quarterly update contrasted with rival Sodexo (EXHO.PA), opens new tab, which warned earlier this month that U.S. President Donald Trump's policies could affect its universities and healthcare business and forecast annual revenue and margin growth at the lower end of its forecast.
Compass, which caters to staff and students at Microsoft (MSFT.O), opens new tab, Shell (SHEL.L), opens new tab, and Harvard Business School, said its North America business saw strong revenue growth across all its sectors. A spokesperson said revenue and volume growth in the U.S. education sector was "holding up well".
"We view Compass' trading update as supportive, providing reassurance over the industry in general and confirming our take that Sodexo's underwhelming momentum has a limited read on the space," JPMorgan analysts said in a note.
Annual underlying operating profit growth is expected to be closer to 11% now, compared with an earlier forecast of high single-digit growth.
Compass said that Vermaat was on track to generate sales of about 700 million euros with a double-digit operating profit margin in 2025.
Vermaat operates in premium locations like museums and art galleries in the Netherlands, France and Germany.
Compass has made several acquisitions in Europe this year -and recent acquisitions were progressing ahead of expectations, supporting its growth forecast, the company said.
Many companies operating in the U.S. are contending with higher inflation as Trump's tariff policies have forced some businesses to pass costs on to consumers.
Compass said its pricing across markets was in line with expectations.
($1 = 0.8558 euros)
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