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Compass announces £1bn special dividend as it reports strong free cash flows in first half

Compass said its expectations for the full year remain "positive" and unchanged
Compass says its pipeline of new contracts is encouraging

Catering company Compass Group plc (LON:CPG) has proposed a £1bn special dividend after achieving revenue and profit growth in the first half.

Organic revenue in the six months to 31 March rose 3.6% at constant currency to £11.6bn, driven by strong trading in North America and improving trends in Europe.

Operating profit increased 5.2% at constant currency to £894mln while the operating margin rose 20 basis points to 7.6%.

Earnings per share increased 4.1% to 37.9p.

The company raised its interim dividend 5.7% to 11.2p and announced a special dividend as free cash flow jumped 26.8% to £502mln.

“Given our excellent cash generation and the strength of the business, we are announcing a £1bn special dividend,” said chief executive Richard Cousins.

“This reflects our commitment to return surplus cash to shareholders whilst maintaining an efficient balance sheet.”

The group said full year expectations remain “positive” and unchanged, with growth tilted more towards the second half of the year.

Cousins added: "Our pipeline of new contracts is encouraging and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of delivery.”

Shares rose 0.38% to 1,601.0p in morning trading.

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