Compass Share Discussion Threads

[altube] 18/5/2005 09:24

Really cannot fathom this, I imagine Franklin will be buying more.

Al

[ards] 18/5/2005 08:53

statement not bad imho. nothing really new apart from some markets extremely challenging on neg side and strong cash flow on positive. usual fear and shorter activity drop price. await broker comment.

[ariane] 18/5/2005 08:21

LONDON (AFX) - Compass Group PLC six months to March 31 2005
Sales - 6.18 bln stg vs 5.84 bln
Pretax profit before goodwill - 260 mln stg vs 282 mln
Pretax profit - 124 mln stg vs 145 mln
EPS before goodwill - 8.2 pence vs 8.5
EPS - 1.9 pence vs 2.5
Interim div - 3.3 pence vs 3.1

vjt/

[ards] 18/5/2005 08:03

so much for that traders opinion.

[ards] 18/5/2005 07:48

MARKET TALK: Compass 1H Data In Line, Confident Statement
0645 GMT [Dow Jones] Compass Group's (CPG.LN) 1H results "are in line with expectations, alongside a very confident statement," trader says. "Stock will start up 5 pence today (Wednesday) and trend better towards 250p over time." Notes FY FCF guidance reiterated, turnover up 6% on like-for-like basis to GBP6.2B. "US was strong, as expected," she adds. Shares closed at 236p. (SMT)

[mozza0508] 17/5/2005 16:33

Looks like price will close a shade up today, just like last update.

But hopefully no nasty surprises tomorrow.

[mozza0508] 17/5/2005 14:55

Al.... I doubt very much that we will see a 3rd profits warning (given that the 2nd warning was a relatively mild one). However results are unlikely to be exciting. What matters is outlook and whether management has finally stabilise the boat. I will be more than happy if CPG can show that it is now back on course.

This is now a real bombed out share so expectations are low and provided results are not seen to be bad, the city will react accordingly and hopefully the share price will creep up gradually.

Have just opened a small long bet and fingers crossed for tomorrow. It will also help if US market can close on a positive note.

[altube] 17/5/2005 14:13

Any views on results on Thursday.

Al

[sealed] 08/5/2005 10:57

Todays Telegraph

Mackay to resign as chairman of Compass
By Robert Peston (Filed: 08/05/2005)

Sir Francis Mackay is to stand down as chairman of Compass, the food services giant, which he effectively created with Sir Gerry Robinson in the mid 1980s.


Mackay's departure follows two recent profit warnings at the £5bn business, which operates the Moto motorway service stations and cooks school dinners for thousands of children. However, it is understood that Mackay's decision to quit pre-dates recent shareholder criticism of the group.

Mackay, who is 60 and also chairs Kingfisher, the DIY group, decided it was time for a new challenge in December.

"Francis has been thinking about the succession for some time," said one of his friends. "This should not be seen as a scalp for angry investors."

His departure may well be followed by that of Mike Bailey, the chief executive, who has borne the brunt of criticism for Compass's recent poor performance.

After the first profit warning last September, the shares lost a quarter of their value. Shortly after that, Bailey - a former chef - said he was confident there would be no further reductions in profit expectations. However, a second profit warning came at the end of March.

"There is no plan for Mike to go," said an executive close to Compass. "His future is a question for the new chairman."

Compass plans to confirm that Mackay is going at the time of its interim results on May 18. It will also unveil the results of a strategic review.

According to analysts, Compass could decide to dispose of significant assets. There has been speculation that Moto could be sold and the proceeds returned to shareholders.

A second cause of concern for shareholders has been that Compass has been generating less cash than expected.

A businessman close to the group acknowledged that it had been poor at communicating to investors that its business model has changed, such that it has become less cash generative than hitherto.

"Lots of what Compass does now eats up capital. That's true of our vending machines and our retailing outlets like Upper Crust and Harry Ramsden," he said. "We probably haven't explained that well."

Although it is not very well known, Compass is the world's biggest food services business, employing 400,000 people in over 90 countries. Its annual sales are £12bn.

Compass was created by a steady stream of takeovers. However, following criticism from shareholders, in recent years it has concentrated on making its existing businesses work harder rather than seeking big new deals.

Compass attracted negative publicity during the furore in the early spring over how little is spent on school dinners. Its Scolarest subsidiary was a provider of the infamous turkey "twizzlers".

However, it has always been frank about the difficulty of providing good food on the tiny budgets it is given. "We should have made more noise about it earlier," said a director.

[grupo] 27/4/2005 10:00

CSFB Upgrades Compass To Neutral

Wednesday, April 27, 2005 4:38:22 AM ET
Dow Jones Newswires



0818 GMT [Dow Jones] CSFB upgrades Compass Group (CPG.LN) to neutral from underperform, lifts target price to 240p from 210p. Waits to hear company report interim data on May 18 and report back to market on the findings of its strategic review. "We hope that Compass will admit it has been pursuing sales growth too aggressively; detail the type of business that isn't generating an acceptable return and how a more considered approach going forward should result in improved free cash flow and return on capital employed," CSFB says. Trades -0.2% at 236.5p. (DWE)

[altube] 22/4/2005 15:01

Yep I think we will see a steady movement up from these levels.

Al

[dhb368] 22/4/2005 09:51

Very quiet on here. Tempted to open a small long from here. Will wait a bit though.

[waldron] 17/4/2005 08:11

Compass rebels demand head of Mackay

Richard Wachman
Sunday April 17, 2005
The Observer

Powerful City shareholders are demanding the removal of Francis Mackay as chairman of Compass, the contract catering group that provides meals to customers as varied as the Pentagon, the BBC and UK primary schools.
The news will shock analysts for two reasons: first, they assumed investors were gunning for chief executive Mike Bailey, and second, Mackay seemed almost untouchable: until recently he was viewed as one of Britain's most successful industrialists.

He helped build up Compass in his time as chief executive and is also chairman of Kingfisher, owner of B&Q, where he played a pivotal role in helping it to integrate Castorama, acquired two years ago. But now a group of UK-based shareholders want Mackay replaced by a chairman who could make further board changes at Compass, as and when he or she sees fit.

The manoeuvre would mirror the removal of Michael Green as chairman-elect of ITV and his replacement by Sir Peter Burt, former head of Bank of Scotland. Burt has made changes to the ITV board, but has kept Charles Allen as chief executive.

The institutional investors have decided it would be better for Mackay to step down rather than Bailey because, as a former operational chief, he is blamed for sowing the seeds of many of the group's current problems.

There are also corporate governance issues - best practice dictates that chief executives should only move upstairs to become chairmen in exceptional circumstances. One shareholder said: 'Here we have an example of why a former chief executive should not have been promoted.' Another investor said: 'I am hearing that there are question marks over whether Compass can return to its former level of profitability.'

Compass has had to cope with logistical issues at a division that looks after its military and oil contracts, as well as deal with a backlash from suppliers demanding earlier payment. Another headache has been to defend its school dinners after Jamie Oliver's recent television series. Shareholders plan to meet Compass directors over the next few weeks. One said: 'We need change at the top, and fast.'

[billmeen1] 15/4/2005 12:04

Franklin now past 11%

[mozza0508] 13/4/2005 09:42

I believe Franklins are so-called 'Value investors'.

They tend to buy into companies with takeover potentials. If my memories are correct, they bought into MKS in the months and years prior to the Philip Green attempted takeover last year.

Their increasing stake in CPG is in my view is a confidence booster. I am very tempted to go long in this one but is still biding my time. A significant juncture will be when CPG next annonce their results in May. It was reported in the press that any takeover of CPG is unlikely to occur before then.

[altube] 12/4/2005 22:56

Anyone any idea of Franklins past record do they buy with a view to takeover

[billmeen1] 12/4/2005 20:38

Hi. Anyone know anything about Franklin? They've been buying heavily recently. 28th Jan, went past 6% of total shares in company, past 7% on 31st Jan, past 8% on 2nd March, past 9% on 5th April and past 10% today. Are they just exploiting a good buying oppotunity or is there a takeover rumour in the air?

[bahtat] 07/4/2005 09:29

waldron

Just to correct someones figures :-)

Compass, via Scolarest, actually provide food at over 3000 schools and colleges in the UK, some 50% higher than stated above.

[waldron] 07/4/2005 09:10

Sodexho's UK appetite sharpens
Ross Tieman, Evening Standard
7 April 2005
FRENCH contract caterer Sodexho Alliance is planning to put the knife into ailing British rival Compass Group by bidding more vigorously for UK school meal contracts.

The Government's decision to spend an additional £280m on ingredients for school meals following a campaign for better food by chef Jamie Oliver has rekindled Sodexho's appetite for the market, a spokeswoman said.

'We very much welcome this decision, which should create more opportunities for us,' a Sodexho spokeswoman said. 'Until now, we have declined to bid for contracts where spending on ingredients was less than 50p a child, because we do not believe you can provide balanced meals for that.'

The additional Government money, which is intended to ensure spending on ingredients of at least 50p per primary school child and 60p per secondary scholar, should ensure Sodexho could contemplate bidding for every school contract put out to tender, she said.



BETTER FOOD: Jamie Oliver's campaign has resulted in more being spent on school dinnersSodexho, based in Paris, already feeds 104,000 UK schoolchildren in 700 schools, blending British staples such as fish pie with Asian imports including sweet and sour chicken to provide nutritionally-balanced meals. Compass provides the food at 2000 British schools.
But Sodexho's outperformance on the stock market is marked. The group's shares are up 13% this year, and first-half sales rose 4% to €5.89bn (£3.13bn), aided by new contracts to feed soldiers and prisoners in Britain.

Compass shares have fallen 31% over the past 12 months following two profit warnings.

[waldron] 06/4/2005 13:02

LONDON, April 6 (newratings.com) - Analyst Nicholas Ward of Deutsche Bank reiterates his "buy" rating on Compass (XGR.BER), while reducing his estimates for the company. The target price has been reduced from 285p to 272p.

In a research note published this morning, the analyst mentions that the downward revision in the estimates is to reflect the company's recent disappointing trading statement. According to Deutsche Bank, the current valuation of the company's stock is attractive. The EPS estimates for 2005 and 2006 have been reduced by 3.1% and 5.2%, respectively.

[mozza0508] 06/4/2005 10:57

The Times reported today that Frankiln Resources has added to thier holdings in CPG to about 9%.

More reasons to buy the share in my opinion.

[waldron] 06/4/2005 07:56

(Adds revenues by region)
PARIS (AFX) - Sodexho Alliance SA said sales in its first half reached 5.890
bln eur, unchanged from the revenues reported in the same period last year.
Organic sales growth, which excludes the impacts from foreign currency
movements and business structure changes, was 4.0 pct, and sales rose 4.8 pct
when excluding the one-time gain from Sodexho's win of the Rugby World Cup
catering contract in November 2003.
"Organic growth accelerated as compared to the prior half year, both in
North America and in Continental Europe, thus confirming our organic growth
objective of approximately 4 pct for the full year," the company said.
In the previous full year, Sodexho's organic sales growth was 4.1 pct.
Food and Management services revenues, which constitute the bulk of
Sodexho's business, slipped 0.1 pct in the first half to 5.759 bln eur, while
organic growth was 3.9 pct.
The company's Service Vouchers and Cards division had sales of 131 mln eur,
representing organic growth of 7.6 pct.
In North America, Food and Management sales posted organic growth of 4.4 pct
to 2.586 bln eur, while sales in Continental Europe saw organic growth of 4.1
pct, to 1.981 bln.
Organic sales in the UK and Ireland were down 2.1 pct, to 640 mln eur, a
decline that had been anticipated by the group.
"The full effect of extending services to the Colchester Garrison in the
Defense segment, as well as the opening of a new correctional facility in
Bronzefield partially compensated for the lower activity and the rationalisation
in the rest of the business segment," Sodexho said.
In the rest of the world, the company saw organic sales growth of 7.9 pct to
552 mln eur.
[e-mail]
js/hjp/ra

[mozza0508] 05/4/2005 00:49

It baffles me that this 2nd profits warnings brings out more support from brokers in particular DKW who advised clients to switch out from Rentokil to CPG resulting in a bounce to 246 on friday. Even Merrill came out with a price target of 300. Their views should put a floor to the price and I expect CPG to trade in a narrow range of 240-250 until next results annoucements in may, the sacking of ceo Bailey notwithstanding.

The latter may well happen soon and if a more credible ceo is found, then the share price will gradually recover. I am inclined to go long rather than short and awaiting an appropriate entry level.

[altube] 04/4/2005 17:14

I still expect a takeover sooner rather than later