MARKET REPORT: Catering giant Compass cashes in as staff return to the office

Shares in Compass Group hit a record high as the world’s largest catering firm cashed in on workers returning to the office.

The FTSE 100 company rose 1 per cent, or 27p, to 2680p – giving it a value of nearly £45billion and taking gains for this year to 25 per cent. 

The stock has risen nearly 170 per cent since its Covid-19 lows in early 2020 when lockdown restrictions closed offices, schools and other buildings – hitting demand for its food.

The latest rally came after Compass, which serves 15m meals a day or 5.5bn a year in schools, offices, hospitals, sporting venues and government buildings around the world, reported a 10.8 per cent rise in annual revenues to £33billion.

Profits in the 12 months to the end of September rose 11.7 per cent to just over £2billion and the company hiked its full-year dividend by 13.7 per cent per share.

The company, which started out feeding munitions workers in wartime factories in the early 1940s, floated on the London stock market in 1988 and joined the FTSE 100 in 1998. 

The shares have risen in each of the last 19 years apart from 2020 when it was laid low by the pandemic.

‘Compass has put together a recipe for dependable growth in an attractive market,’ noted Derren Nathan, head of equity research at broker Hargreaves Lansdown.

It was a jittery day on global stock markets after Donald Trump announced plans to slap tariffs on China, Canada and Mexico – some of the USA’s biggest trading partners.

The FTSE 100 fell 0.4 per cent, or 33.07 points, to 8258.61 and the FTSE 250 lost 0.9 per cent, or 180.61 points, to 20568.65.

Aerospace parts maker Melrose Industries was on the front foot, however, after JP Morgan raised its price target to 850p from 650p and said the stock was ‘significantly undervalued’. 

Shares rose 7.7 per cent, or 40.4p, to 567.6p.

Burberry shares rose 2.8 per cent, or 25p, to 925.8p – their highest level since June – as their recent recovery continued. The luxury brand’s stock is still down around a third this year, however.

 per centTesting and certification firm Intertek rose 3.3 per cent, or 150p, to 4662p after it said it was ‘well on track’ to deliver a strong performance this year.

Shares in utilities bundling firm Telecom Plus gained 2.2 per cent, or 38p, to 1800p as it stuck to profit forecasts for the year despite warning the Budget will add £3m to its annual costs.

Annual profits at Topps Tiles nearly halved to £6.3million as it grappled with a tough home improvement market and cautioned over ‘significant’ cost pressures in 2025. Shares slid 1.3 per cent, or 0.5p, to 39p.

Sausage maker Cranswick reported a 6.1 per cent rise in first-half revenues to £1.3billion and a 3.8 per cent increase in profits to £90.2million.

With demand strong in the run up to Christmas, the pork and poultry producer said it expects full-year results to be ‘in line’ with City expectations. But shares fell 3.8 per cent, or 190p, to 4880p.

Commercial property firm London Metric lost 0.3 per cent, or 0.5p, to 190p after profits and rental income jumped after it bought real estate investment trust LXi.

Stock Watch – Severfield

Shares in Severfield crashed after it warned profits for the year will be lower than previously thought.

The construction company reported a 17pc rise in revenue to £252.3m in the first six months of the year. 

But it made losses of £5.8million, having turnedillion a profit of £11million in the same period last year, and said the predicted recovery in certain areas has been slower than previously anticipated. 

Shares slumped 36.2 per cent, or 31.6p, to 55.6p.

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