LONDON -- The shares of Compass (ISE: CPG.L) are down 0.71% to 704 pence this morning as investors appear indifferent to the group's 10% dividend lift.
The FTSE 100 member, which supplies a variety of catering services to businesses and schools, said today that its annual payout had been raised from 19.3 pence to 21.3 pence per share. The dividend news was accompanied by 12-month results that showed sales up 8% to almost 17 billion pounds and profit up 7% to 1.1 billion pounds. Compass said its North American operations had fared particularly well, with sales and profit up around 10%.
Sir Roy Gardner, chairman of Compass, said:
The Group has had another strong year with good levels of revenue and profit growth. The strength of our cash flow has also enabled us to invest in the business to drive organic growth, as well as make infill acquisitions and reward shareholders. Looking forward, Compass is well placed to exploit the significant growth opportunities that we see in many of our markets.
Sir Roy added that the group's future prospects had prompted the launch of a 400 million pound share-buyback program during 2013. A 500 million pound buyback should be completed by the end of this year.
Although the market appeared not to welcome today's dividend lift from Compass, longtime shareholders of the group will be more appreciative. Indeed, they have witnessed their dividends triple in value during the last 10 years -- equivalent to an annual compound growth rate of almost 12%.
In addition, canny investors could have snapped up these shares for as little as 175 pence during 2005. Even after today's price slip, a fourfold return within seven years remains a handsome investment.
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