Broker snap: Seymour Pierce reiterates buy for Compass

23rd Nov 2011 09:03

Seymour Pierce has reiterated its buy rating and 650p target for contract caterer Compass following the group's full-year results.The broker says that figures were in line with expectations, with revenues up 9.4% and operating profits 9% higher. Operating margin was flat at 6.9% but would have improved by 20 basis points after excluding the £15m negative impact from the Japanese tsunami."The outlook is positive and we expect Compass to continue to improve organic growth and margin," Seymour Pierce said."Acquisitions will continue to feature in the coming months but the company has now turned its attention to the efficiency of the balance sheet and we expect more cash to be returned to shareholders."Shares were trading just 0.3% higher at 561.5p by 09:12, paring earlier gains of around 1.7%.BC