Compass unveils 1bn-pound special divi after solid first half

14th May 2014 07:23

- 1bn pounds to be return to shareholders- Interim dividend up 10 per cent- Revenues rise 4.2 per cent organically- Currency impact weighs on reported resultsCatering giant Compass has hiked its interim dividend after a solid first half and unveiled a one billion-pound capital return to investors.The return, which Compass said was due to ongoing strong cash flows, is being effected by way of a special dividend and share consolidation. The group also intends to continue with the current £500m share buyback programme announced in November 2013, although purchases will be suspended until the special dividend is paid. As such, the buyback will now by completed in 2015.Meanwhile, the interim dividend was raised by 10% to 8.8p per share."Strong cash generation has underpinned our investment in the business and our commitment to reward shareholders," said Chief Executive Richard Cousins.Revenues totalled £8.7bn in the six months to March 31st, up 4.2% on an organic basis which includes a 0.4% positive impact from the timing of Easter.Pre-tax profit rose 5.7% on a constant currency basis to £608m, while earnings per share increase 10% to 25.3p.Compass said that growth was driven by strong new business growth and "excellent performance" in North America and the Fast Growing & Emerging regions.However, on a reported currency basis, revenues declined by 1.6% after sterling strengthened against many of its key regions' currencies during the period, such as US and Canadian dollars, the euro, yen, Australian dollar and Brazilian real."Looking forward, the outsourcing proposition remains compelling and I'm positive about the opportunities for further revenue and margin progression," Cousins said.BC