By Tapan Panchal
LONDON--Compass Group PLC (CPG.LN) said Wednesday it will return 1 billion pounds ($1.29 billion) to shareholders via a special dividend, as the catering and support-services provider reported a 25% jump in first-half pretax profit.
The company intends to pay a special dividend of 61 pence a share in July though part of the cash return to shareholders would be through a reverse stock split, also known as a share consolidation, details of which Compass said it would announce later this month. Both moves would be subject to shareholder approval, Compass said.
The company said it has arranged bridge funding to pay for the special dividend in the first instance, to be replaced by "longer-term bond finance in due course."
Compass raised its interim dividend by 5.7% to 11.2 pence a share.
Compass recorded pretax profit of 831 million pounds ($1.08 billion) for the six months ended March 31, up from GBP666 million in the year ago period, on a 20% rise in revenue to GBP11.62 billion from GBP9.67 billion. Operating profit rose to GBP877 million from GBP704 million.
"Our expectations for fiscal 2017 are positive and unchanged, with growth weighted to the second half. 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," said Chief Executive Officer Richard Cousins.
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