Compass hikes annual dividend after 'another good year'

26th Nov 2014 07:11

Catering group Compass lifted its annual dividend by over a tenth after an improvement in both sales and profits in the year to 30 September.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.Sales would have been down 2.8% on a reported basis due to the significant strengthening of sterling during the period.Nevertheless, organic growth was driven by "good levels of new business wins and high retention rates", it said.From a geographic perspective, momentum had increased in all regions, with strong growth in North America, improving conditions in Europe and Japan, and accelerating growth in emerging markets.A 10 basis-point improvement in the underlying operating profit margin to 7.2% helped pre-tax profit rise 5.4% to £1.16bn, while earnings per share rose 10.5% to 48.7p.Compass proposed a full-year dividend of 26.5p per share, up 10.5% on last year.Chief executive Richard Cousins said Compass "had another good year"."We generated good levels of cash flow, which has allowed us to reinvest in the business and reward shareholders through a proposed increase in the dividend alongside our ongoing £500m share buyback," he said."We also optimised our balance sheet and returned a further £1bn to shareholders through a special dividend announced in May."