Surrey / UK. (cg) British Compass Group PLC released its Q1-2023 results announcement for the three months ended 31 December 2022. A good start to the financial year with strong growth in all regions, the company reported in its announcement as follows.
In the first quarter of the year, the Group’s organic revenue grew by 24 percent. We continued to benefit from strong outsourcing trends with net new business growth of 5.5 percent, significantly above our historical rate of around 3 percent, and in line with FY 20221. Like for like volumes were particularly strong in Business + Industry, as employees continued to return to the office, and in Sports + Leisure, where participation rates remained high. Whilst inflation remained elevated, we continued to work closely with our clients to help mitigate this pressure both operationally and through appropriate pricing.
All regions performed strongly in the quarter, with organic growth of 23 percent in North America, 26 percent in Europe and 27 percent in Rest of World. Growth drivers across all markets were similar, with net new business growth of 5 – 6 percent, and double-digit like for like volume increases in all regions. We are particularly pleased with the continued strong net new business performance in Europe which is benefiting from the increased focus on growth and retention, supported by investments in people, brands and processes.
In the first quarter, the Group’s net expenditure on bolt-on acquisitions was GBP 55 million, further strengthening our portfolio of brands, and our digital and procurement capabilities. There is a strong pipeline of exciting opportunities across all regions and sectors, and we remain focused and disciplined in our approach to acquisitions.
Share buyback programme
As at 7 February 2023, we had completed GBP 163 million of the GBP 250 million share buyback programme which was announced at our FY results in November 2022.
Trading results from our overseas operations are translated at the average exchange rates for the period. If these currency movements continue for the remainder of the year, foreign exchange translation would positively impact FY 2022 revenue by GBP 1,314 million and operating profit by GBP 94 million.
Summary and outlook
The outsourcing market remains strong, and we are excited about the significant growth potential across our markets. The increasingly complex operating environment and growing focus on sustainability and digitalisation, combined with our market leading offering, mean we are best placed to capture these opportunities. While populations continued to return to the office and consumer demand has been resilient, we are mindful of the uncertain macro-environment and any potential impact on discretionary spending. We remain positive for FY 2023 and reiterate our guidance. We expect operating profit growth above 20 percent on a constant currency basis, organic revenue growth of around 15 percent, weighted towards the first half of the year, and an underlying operating margin above 6.5 percent. Looking further ahead, we remain excited about the significant structural growth opportunities globally, leading to the potential for revenue and profit growth above historical rates, returning margin to pre-pandemic levels and rewarding shareholders with further returns.