By Ed Ballard
LONDON--Compass Group PLC (CPG.LN) Wednesday said it will return 500 million pounds ($811 million) to shareholders via a buyback program as it reported an increase in full-year sales, even as pretax profit fell.
The world's biggest catering company said improving cash flow and profit margins, along with revenue gains led by its U.S. and emerging-markets divisions, allowed it to launch the buyback, which it expects to complete in 2014. It increased its full-year dividend to 24 pence from 21.3 pence last year.
"Compass has maintained good momentum during the year," said Chief Executive Richard Cousins. "High levels of new contract wins in North America and Fast Growing & Emerging have driven good organic revenue growth of over 4% and our operating margin has increased by 20 basis points to over 7% for the first time."
Pretax profit in the year to Sept. 30 fell 8.6% to GBP721 million from GBP789 million a year earlier, on revenue that was up 3.9% at GBP17.6 billion. On an underlying basis--stripping out impairments and other costs--pretax profit rose 9.2% to GBP1.19 billion. Year-end net debt was GBP1.19 billion, up from GBP973 million last year.
"Economic conditions in Europe and Japan remain challenging, but the actions we've taken have enabled us to manage these and improve profit and margins," Mr. Cousins said.
Shares closed Tuesday at 927 pence, valuing the company at GBP16.6 billion.
Write to Ed Ballard at firstname.lastname@example.org
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