Investors are dining out on catering group Compass after a 33% rise in full year profits beat market expectations.
The company's shares have climbed to the top of the FTSE 100 leaderboard, up 19.3p to 421.3p and taking the top spot from rumoured takeover target International Power.
Compass, which supplies food to schools, offices as well as the O2 Arena and Chelsea Football club, said it had benefited from new contract wins, a weaker pound and cost savings of £161m. Chief executive Richard Cousins said the prevailing economic conditions would impact organic revenue growth, but its pipeline of of new business looked strong. Mark Brumby at Astaire Securities said:
On around 32p of earnings this year, the group trades on 12.6 times this year's earnings, which would not appear to be particularly expensive for a group of Compass's quality. However, the shares have had a good run (rising by around £1 in the last quarter) and currencies could always move the wrong way. Nonetheless, we believe that shareholders have every reason to be reassured by this morning's numbers.
Meanwhile International Power is up 10.9p to 286.5p on continuing takeover talk, with France's GDF Suez the latest name in the frame.
Overall - ahead of the revision of UK GDP which analysts believe could be better than the early estimates and show the country closer to coming out of recession - the FTSE 100 has climbed 21.94 points to 5345.90.
