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Investing.com -- Shares of Compass Group (LON:CPG) rose more than 4% on Tuesday after the U.K.-based food services provider raised its full-year earnings guidance and announced the €1.5 billion acquisition of Vermaat Group to expand its operations in continental Europe.
Compass reported 8.6% organic revenue growth in the third quarter ended June 2025, ahead of consensus estimates of 7.7%.
This marked an improvement from the 7.7% growth recorded in the second quarter. The North America segment led performance with 9.6% growth, exceeding the 7.5% estimate.
International growth slowed to 6.6% from 8.1% in the prior quarter, below the 8% forecast, due to the timing of contract mobilizations.
Net new business wins remained within the 4–5% range, with a first-half figure of 4.4%.
Client retention was over 96%, broadly consistent with the 96.2% level recorded in the first half.
Volume growth was positive, and pricing trends aligned with internal expectations, which Jefferies estimated at 2.5% to 3%.
As a result of the stronger-than-expected quarterly performance, Compass raised its full-year 2025 guidance.
Adjusted EBIT growth, excluding currency effects, is now expected to reach around 11%, compared with prior guidance of high single-digit growth.
Organic revenue growth is projected to exceed 8%, up from at least 7.5% previously. Operating margins are expected to expand by 15 to 20 basis points to 7.3%. Foreign exchange is forecast to reduce revenue and adjusted EBIT by approximately 0.1% and 0.4%, respectively.
The company also announced an agreement to acquire Vermaat Group, a food services operator headquartered in the Netherlands. The deal is valued at €1.5 billion enterprise value.
Vermaat operates in the Netherlands, where it is a market leader, and has operations in Germany and France.
The company generates annual revenue of about €700 million, equivalent to roughly 2% of Compass’s total revenue and around 8% of its European division, and operates with double-digit operating margins.
The transaction is expected to be accretive to both margins and earnings in its first full year of ownership.
Net leverage is projected to reach 1.5 times EBITDA by fiscal 2026, the upper limit of Compass’s stated target range of 1 to 1.5 times.