Compass Group plc (ADR) (OTCMKTS:CMPGY) managed to remain in the green but barely as it closed at the end of the last trading session with a gain of 0.29% only. The volume of the day at 206,000 was higher than the daily average of 116,000 but none of the numbers was too impressive or significant in any way. The stock has been rallying for the last few weeks but the structure at the current point may raise some pointed questions about the actual bullish strength. The rising Wedge pattern visible on the chart attached implies a loss of momentum and the last rally may have achieved equality with the previous one.


Richard Cousins, the CEO of Compass Group plc (ADR)(OTCMKTS:CMPGY) said that he was delighted to announce that company has recorded strong set of results. The organic revenue was up 5.7% in 1Q2015, highlighting the increased investment and focus in growth. The company delivered ten basis points of margin expansion, as they continued to achieve efficiencies during the business. Prominently, earnings per share surged 12.3% and the company is planning to increase the dividend by almost the same amount.

The details

Dominic Blakemore, the Finance Director of Compass, stated that organic growth for the half fiscal came at 5.7%. Thought sterling has depreciated against the U.S. dollar, it has been largely offset by its appreciation against several of the Group’s other major currencies, resulting in a negative impact of 0.6% from currency translation.

Overall revenue in reported period jumped 4.7%. Compass Group again delivered remarkable performance in North America as it recorded organic growth of 8.2%. It has been led by encouraging new business wins and extraordinarily high retention rates. Blakemore added that there had been some volume improvements in some parts of the U.S. operations.

The highlights

Compass Group management reported that they are delighted to see Japan and Europe return to growth, delivering almost 1% organically. This positive performance highlights the investments the company has made in sales and retention procedures in recent years. However, like-for-like volumes continued to be negative.

Strong growth in emerging industries, nearly 14%, is led by new business and the underway structural shift to outsourcing. The company is witnessing more weakness in remote, defense and offshore sector, soft like-to-like volumes in various markets and the expected drop in Australia. Compass Group stated that the super region recorded organic growth of 7.7%. The reported operating profit of £688 million boasts strong organic growth.