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Business, Finance, Occupation & Industry

The Men Who Run Compass Group

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By Tony Reading, The Motley Fool

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LONDON — Management can make all the difference to a company’s success and, thus, its share price.

The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.

In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today, I am looking at Compass Group , the world’s largest contract caterer.

Here are the key directors:

Director

Position

Sir Roy Gardner

Chairman

Richard Cousins

Chief Executive

Dominic Blakemore

Finance Director

Gary Green

CEO, North America

Andrew Martin

CEO, Europe and Japan

Heavyweight
Sir Roy Gardner has been chairman since 2006. In his executive career, he rose through the finance functions of GEC to succeed Arnold Weinstock as Managing director of GEC-Marconi. He joined British Gas as finance director in 1994 to oversee the demerger of Centrica, subsequently becoming CEO of Centrica.

Regarded as a City heavyweight, his non-executive career has not been without controversy. He became chairman of “fast-growing” property services group Connaught in May 2010, only to go into administration six months later. In the world of football, he became chairman and part-owner of Plymouth Argyle in 2009, resigning the next year shortly before it entered administration.

Sir Roy recently announced he will retire next year.

Low profile
Richard Cousins has also been in post since 2006, but the CEO is a lower-profile character. He began his career in planning roles with Cadbury Schweppes and BTR, joining plasterboard maker BPB in 1990, and rising to become CEO in 2000. He took BPB into the FTSE 100, leaving for Compass when the firm was taken over by Saint-Gobain.

Compass’s shares have tripled during the tenure of the current chairman and CEO.

More accountants
A chartered accountant, Dominic Blakemore has been finance director for just 12 months. He was previously FD of Iglo Foods, which he joined from Cadbury, where he held various posts, including European Finance Director, and Group Financial Controller.

Compass’s two divisional directors are also former finance professionals. Gary Green has been with the company since 1986, initially in finance roles, joining the board in 2007.

Andrew Martin joined as finance director in 2004, having previously been FD of First Choice Holidays. His move to run Europe and Japan was part of a reshuffle on the arrival of Dominic Blakemore, to free the CEO to concentrate on developing Compass’s emerging markets business.

Compass’s senior independent director Sir James Crosby abruptly resigned this week in the wake of criticism over his stewardship of HBOS. The timing is unfortunate, with the chairman having recently announced his retirement, but the company swiftly replaced him with Sir Ian Robinson, a director since 2006, and former chairman of Ladbrokes. However, the team of five non-execs look a little thin.

I analyze

From: http://www.dailyfinance.com/2013/04/11/the-men-who-run-compass-group/

Business, Finance, Occupation & Industry

Should You Buy Compass Group Today?

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By Royston Wild, The Motley Fool

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LONDON — Investor enthusiasm in food and support services specialist Compass Group has been steadily gaining pace in recent months, pushing the firm’s shares 14% higher during 2013 and to all-time highs of 845 pence last week.

And I expect the company to keep punching new share-price summits, as strength in North America and rising business levels in exciting developing markets underpin future growth.

Firm reports solid H1 trading statement
Compass announced in yesterday’s bubbly trading update that despite ongoing weakness in Europe and Japan, organic growth is expected to have risen 5% during the first half of the current financial year.

Robust business in North America has helped to drive growth momentum, Compass noted, with organic revenue rising 8.5% during the period. Healthy new business inflows, excellent client-retention, and chunky like-for-like growth all boosted the top line, while a 10-basis-point improvement in operating margins sweetened the news.

And the company continues to rev up business in emerging markets, with organic sales rising 10% during the period. Compass noted particular strength in Australia, Brazil, and Turkey, although it also saw rapid growth in China, Russia, and India, which currently contribute a small portion of revenue.

Compass conducted M&A activity in the region of 80 million pounds in the September-to-March period, including the purchase of two health care firms in the U.S. and the acquisition of a food services company in Colombia and another in Canada. I expect further bolt-ons to supplement the company’s already stellar growth story.

Earnings ready to accelerate higher
Compass has an enviable track record of punching steady earnings growth despite the ongoing macroeconomic travails of recent years. And forecasters expect the company to maintain this steady expansion over the medium term: Earnings per share are anticipated to increase 8% in the year ending September 2013 to 46 pence before marching 11% higher to 51 pence the following year.

The firm also has a decent track record of building dividends, with last year’s 21.3 pence payout up more than 10% from 2011. And City brokers expect this to rise to 23.2 pence this year before rising to 25.8 pence in 2014, boasting excellent coverage right at the security mark of two times. Further, the firm has also earmarked 400 million pounds’ worth of share buybacks, which should be completed by the end of fiscal year 2013. The company has already completed 93 million pounds of the program.

Compass currently changes hands on a P/E rating of 17.9 and 16.1, respectively, for 2013 and 2014. Although this does not appear cheap at first glance, I believe the pan-global group’s heavy weighting toward North America, coupled with accelerating operations in new geographies, provides investors with excellent growth prospects.

The expert view to growth elsewhere
If you already hold shares in Compass Group and are looking to significantly boost your investment returns elsewhere, check out this special Fool report, which outlines the steps you might wish to take if you …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Why Compass, Wolseley, and Eurasian Natural Resources Should Lag the FTSE 100 Today

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By Alan Oscroft, The Motley Fool

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LONDON — The FTSE 100 is still hovering below the 6,400 level, up a mere four points to 6,383 as of 8:50 a.m. EDT. The U.K.’s major index is being held back today by a small handful of companies whose share prices are struggling, while markets in general are still feeling the aftershocks of the Cypriot financial earthquake.

So which companies are causing grief for the FTSE today? Here are three that are leading the way down.

Compass
Compass Group shares have been rising high of late, gaining about 25% over a 12-month period. But they’ve 2% this morning, extending a recent mini-reversal, after the catering-services group released a pre-close trading update ahead of first-half results due on May 15.

The first half was described as good, and we were told that full-year expectations “remain positive and unchanged.” First-half organic revenue is expected to grow by 5% (excluding the effects of Easter). The group’s 400 million pound share buyback plan announced in November 2012 is underway, with 93 million pounds having been returned so far.

Wolseley
We’ve had another reversal of late, with highflying Wolseley shares retreating from a previous annual rise of more than 30%. Today the shares are down a further 3.2% to 3,107 pence after the plumbing and building-supplies firm released halftime results.

Like-for-like revenue for the period is up 2.2%, but pre-tax profit fell 20% to 199 million pounds, and the firm is in the process of disposing of some of its European operations. Chief executive Ian Meakins said, “We continue to see strong growth in the USA, a broadly flat performance in Canada and the U.K. and very weak conditions in Europe.”

Eurasian Natural Resources
Eurasian Natural Resources Corporation shares are continuing the slide that began ahead of the firm’s final results announcement on March 20. Since closing at 351 pence on March 14, the price has slumped 26% to 261.5 pence, including today’s 2.5% fall. Over the past year, the price is down nearly 60%.

The latest set of results from the Kazakhstan-focused miner and metals processor revealed a loss of $852 million, compared with a profit of $1.99 billion in 2011. There will be no final dividend this year.

Reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5.7% yield and could be set for some nice share-price appreciation, too? It’s the subject of our brand-new report “The Motley Fool’s Top Income Share For 2013,” which you can get completely free of charge — but it will only be available for a limited period, so click here to get your copy today.

The article Why Compass, Wolseley, and Eurasian Natural Resources Should Lag the FTSE 100 Today originally appeared on Fool.com.


Alan Oscroft has no position in any stocks mentioned. The Motley Fool …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Should I Buy These 5 Shares?

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By Harvey Jones, The Motley Fool

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LONDON — I’ve been popping stocks into my shopping basket in recent weeks, and it’s about time I took one or two to the checkout. Here are five stocks I’ve found tempting, so should I buy any of them?

Going Continental
InterContinental Hotels Group has enjoyed a barnstorming five years, growing 160%. And it just keeps rising, up 15% in the past three months alone. This U.K.-listed global hotel chain group is a play on the recovery, particularly in the U.S., where it earns 45% of its revenues. When business starts building again and travelers get traveling, IHG‘s room occupancy rates will rise (and they’re pretty full already). Every year, 153 million people spend a night at one of its nine brands, which include Holiday Inn, Crowne Plaza, and InterContinental. Yet the group doesn’t own the physical hotels, having sold most of them and signed long-term management contracts to lease them back from the new owners. This leaves InterContinental light on assets and heavy on profit. Full-year 2012 results showed revenue rising 4% to 1.83 billion pounds and operating profit up 10% to 614 million pounds. The dividend was hiked 16%. It now yields 3.3%, covered a meaty 2.2 times. InterContinental’s exposure to the U.S. and China has helped it survive the slowdown in Europe, but trading at 21 times earnings, it does looks expensive. With forecast earnings-per-share growth of 11% this year and 9% next year, there is plenty of upside, but you will pay a price for it. This is more of a hold than a buy.

Losing my Compass
Contract caterer Compass Group is another barnstormer, also up 160% over five years, and up 14% over three months. The company, which provides food and support services to businesses, schools, hospitals, universities, and sports facilities, employs 500,000 people across 50 countries and serves 4 million meals a year. As if that weren’t enough, it has diversified into reception and office services, desk cleaning, and routine maintenance. Given all the offices in all the world, that gives it an almost unlimited target market. Compass trades at 8.30 pounds. Bank of America has just lifted its target price to 9.25 pounds and nailed it as a buy. Forecast EPS growth looks positive at 8% in the year to September 2013 and 11% over the 12 months after that. As with InterContinental, recent successes make it expensive: Compass trades at nearly 20 times earnings. The dividend is relatively disappointing, yielding just 2.6%. This could be a great buy in the next correction.

Pick up a Pearson?
Pearson hasn’t done so well lately, with management warning of tough trading conditions. Pearson, which owns the Financial Times, publisher Penguin, and a thriving educational division, currently trades at 11.76 pounds, down 3% over the past year. Yet its profit held up in 2012, with full-year sales rising 5% and adjusted operating profit up 1% to 936 million pounds. …read more
Source: FULL ARTICLE at DailyFinance