Compass delivers solid results but The Share Centre stays at 'hold'

26th Nov 2014 10:02

Compass' full-year results were "solid", according to The Share Centre, but the broker said the catering stock's valuation looks "full"."Global catering group Compass delivered a solid set of full-year results this morning which were in line with market expectations," said analyst Ian Forrest.The company, which provides food and catering services to the schools, government and hospitality markets, said revenues totalled £17.1bn, up 4.1% on last year on an organic basis.A 10 basis-point improvement in the underlying operating profit margin to 7.2% helped pre-tax profit rise 5.4% to £1.16bn."Compass saw strong organic sales growth in North America, which accelerated in the second half of the year, and good growth in emerging markets where there is a gradual move to outsourcing. However, Japan and Europe remain difficult with sales continuing to fall," Forrest said.The Share Centre kept a 'hold' recommendation on the stock."The company has a good pipeline of new contracts and expects to see progress in all its regions, however much of this is already factored into the share price and the valuation looks relatively full."Compass shares were down 0.1% at 1,073p by 09:14 on Wednesday.