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Caterer Compass buoyed after sports crowds boost

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Catering giant Compass has said trading in the current quarter has surpassed expectations as it was buoyed by returning sports crowds.

However, shares in the FTSE 100 company dipped on Tuesday morning after it said it remains “cautious” about the pace of recovery in its business and industry canteens as many people continue to work from home.

Compass told shareholders that trading for the current quarter, which is due to end in 10 days, is expected to be around 86% of levels from the same period in 2019, before the pandemic struck.

The contract caterer said it had predicted that revenues would be between 80% and 85% of 2019 levels.

It said revenues for the full year to the end of September are expected to be around 76% of levels from 2019.

Compass said its strong recent trading was led by “improved attendance” at sports and leisure events, with strong spend per customer.

Meanwhile, its healthcare and defence, offshore and remote divisions have all been “resilient” throughout the pandemic and performed ahead of pre-pandemic levels.

The firm added that the return to education has been “strong” in September, helping a recent rebound in spending at campus canteens.

In a statement, Compass said: “We continue to be encouraged by the ongoing growth opportunities including strong momentum in new business wins, from the acceleration in first-time outsourcing, and increased potential for market share gains.”

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Compass Group is pointing in the right direction.

“The contract caterer has benefited as more of us have ventured out to watch live sport, while more resilient divisions including feeding the defence industry have held up remarkably well.

“The bigger question now turns to the business and industry division – office occupancies and schooling remain disrupted, and to some degree these changes will be permanent.”

Shares in the company were down 1.4% at 1,465p after early trading.

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