Latest news with #DominicBlakemore
The Independent
22-07-2025
- Business
- The Independent
Compass takes further slice of European catering market with £1.3bn takeover
Global catering group Compass has struck its biggest ever deal after agreeing to buy a European upmarket food firm for around 1.5 billion euros (£1.3 billion). Compass – which provides food services to millions of people every day, including in schools and universities, businesses and for events – is buying Vermaat, which is expected to make sales of around 700 million euros (£608 million) this year. Vermaat, which has its headquarters in the Netherlands, offers premium food services in offices, healthcare sites and venues, such as museums and art galleries, in the Netherlands, France and Germany. The deal was unveiled as Compass, which is the world's biggest catering group, also upped its annual outlook, with expectations now for underlying earnings to grow by 'towards' 11%, up from an earlier forecast for a high single-digit increase, driven by sales growth of more than 8%, not including the boost from acquisitions. Shares in Compass lifted 5% in midday trading on Tuesday. Dominic Blakemore, group chief executive of Compass, said the takeover of Vermaat was a 'landmark acquisition'. He said: 'Vermaat is a best-in-class food services business which will significantly strengthen Compass Group's premium offer across Europe and will provide us with exceptional leadership talent. 'This strategic acquisition represents a step change in our core markets by creating a strong platform for expansion across Europe.' Compass hopes the deal will help it take a further slice of the food services business across Europe, which is estimated to be worth at least 115 billion euros (£99.8 billion). Vermaat serves more than 200,000 people with food every day across more than 700 locations. The latest trading update from Compass also showed that revenues rose 8.6% in its third quarter to the end of June.
Daily Mail
22-07-2025
- Business
- Daily Mail
Compass shares soar as caterer lifts guidance and reveals record takeover
Compass Group revealed another major acquisition on Tuesday as the catering giant's trading performance continues to surpass expectations. The €1.5billion (£1.3billion) takeover of Dutch foodservice operator Vermaat, Compass's largest ever deal, is part of the group's plans for European expansion after decades of acquisition-led growth in North America. Compass, which caters to staff and students at Microsoft, Shell and Harvard Business School, has been ramping up M&A activity since its Covid-era slump. The firm, which lifted annual guidance on Tuesday after better-than-forecast growth in its third quarter, said Vermaat offers the group a 'unique opportunity for further sustainable growth in Europe' Vermaat, a market leader in the Netherlands with a growing presence in Germany and France, has delivered a compound annual growth rate of nearly 20 per cent over the last 15 years, and is on track to generate sales of €700million in 2025. Compass boss Dominic Blakemore said: 'This strategic acquisition represents a step change in our core markets by creating a strong platform for expansion across Europe.' It came as Compass raised its annual profit forecast after reporting revenue growth of 8.6 per cent for the three months to the end of June. International sales rose 6.6 per cent during the quarter while its largest market, the US, grew by 9.6 per cent. Compass Group shares led the FTSE 100 on Tuesday, adding 5 per cent to 2,651p by midmorning. They have now added more than 20 per cent over the last 12 months and around 130 per cent over the last five years. Adam Vettese, market analyst at eToro, said: The company's combination of robust underlying growth and successful recent acquisitions demonstrates strategic discipline and supports Compass as a leader in outsourced catering. 'However, the sizeable €1.5 billion price tag for Vermaat means the balance sheet leverage will tick higher, adding some financial risk and making integration a key focus in the months ahead. 'Overall, with resilient industry trends and a strong track record of delivering on M&A, Compass is well placed to capture further market share. 'But with a more ambitious acquisition strategy, some caution is warranted around execution and debt, particularly as its current valuation leaves little room for indigestion.'
New Statesman
09-07-2025
- Business
- New Statesman
School catering firms make millions while children eat Bad Pie
Photo by Daniel Leal/AFP Having been told about the horrors served for lunch at our local primary school – which include something described as a 'vegetable biscuit' and a dish known among the inmates as 'Bad Pie' – I remarked to one of the teachers that everyone thinks school dinners are horrible when they're a kid, but they're probably quite nice. Nope: even the teachers, I was told, found the meals revolting. Bad Pie is the taste of outsourcing. The Department for Education currently pays a meal rate of £2.58 per eligible pupil. The average English and Welsh prison has a food budget of £3.07 per prisoner per day (£4.14 in Scotland). Neither is extravagant, and this certainly isn't an argument for even worse food in prisons. But it does help to illustrate how little is spent on the nutrition of growing bodies and developing minds. What really matters is the portion of that £2.58 per day that actually ends up as food. Reading the accounts of the company that provides the Bad Pie, I found it declared a turnover of more than £70m in 2023-24. It is owned by a holding company that has five directors and who collectively paid themselves more than £2m in that year. The highest-earning director was paid more than £1m. This single salary would have been more than enough to buy up the entire stocks of 'raw materials and consumables' (food) declared on the company's balance sheet for the year. And that's just their salary, before pension contributions (more than £50,000 shared between five directors), or the hundreds of thousands in dividends that were paid to the owners (one director also owns most of the shares). So, there's excellent money to be made from owning a company that sells school dinners. I guessed the people serving the dinners aren't as richly remunerated, so I pretended to be a jobseeker and answered an advert for catering staff with the company. I was told that it paid £12.21 per hour – the UK minimum wage. In the time it takes a dinner lady to earn £1, the person at the top of the company gets something around £50. But this is small beans for the school-dinner rich list. The biggest school caterer in the UK is Chartwells, which is – along with other school catering firms such as Pabulum – a subsidiary of Compass Group, the world's largest food service provider. Compass Group's most recent accounts state that the total remuneration received by its CEO, Dominic Blakemore, (including pension contributions, bonus and long-term incentive plan) reached £9,499,000 in 2024. That's about £8,765 for each of Mr Blakemore's three meals a day for a year, and 330 times the pay of the average worker at his company. The Compass accounts contain a long explanation of why this, and other seven-figure salaries in the company, are necessary. The proof is in the pudding, however, and Chartwells has had the occasional unhappy customer. Jason Ashley, a headteacher from Southampton, wrote to parents last year to apologise for the quality of meals at his school. 'Chartwells seem to be unable to bake a potato,' he wrote. Sharon Hodgson MP, who has chaired the all-party parliamentary group on school food for 15 years, told me she has been hearing 'more and more horror stories of quality and portions going down, and probably that will be worse in the schools that have a contract catering company'. Subscribe to The New Statesman today from only £8.99 per month Subscribe The overall quality of school meals fell dramatically during 2022, as budgets were squeezed between higher costs and rising wages. A survey by Hodgson's group found that some contract caterers stopped serving fish and most vegetables. Only the very cheapest processed meat was served, in some cases just once a week. Burgers became bunless. Children began to return home hungry, having been given much smaller portions. In one school, the typical lunch became a sausage roll and a piece of fruit. One catering provider claimed it had dropped fish from the menu due to 'lots of the UK fish being caught in Ukraine waters', which is, if you'll forgive me, utter pollocks: the UK has never imported any significant proportion of its fish from Ukraine. At one rural school, the caterer simply cancelled their contract because it was no longer worth having, and a parent had to step in – at their own expense – to prepare meals. Schools are supposed to meet certain nutritional standards, but these are in most cases not met, Hodgson told me, because 'nobody is monitoring them'. Her experience is that while some large food companies do provide good food and good value for money, schools typically offer better food when they bring it back in-house. She spoke admiringly of one group of kids who documented their meals, sacked their caterer and negotiated a new supplier themselves. The problem is that running a school is already a very difficult job and managing the catering in-house is more work. That's how outsourcing gets into the state – by promising to take away some of that work – and why it can be hard to get rid of, because the more overworked public sector staff are, the more they welcome anyone with a quick solution. And that is why almost a third of public spending – £326bn in 2022-23 – is outsourced. A truly horrifying amount of Bad Pie is being served, and it's making some people a lot of money. [See also: Britain is growing old disgracefully] Related
Daily Mail
14-05-2025
- Business
- Daily Mail
Compass Group profits surge as catering demand holds up
Catering giant Compass Group has reiterated annual forecasts after enjoying a healthy expansion in first-half sales and profits. The world's largest catering provider revealed its organic turnover jumped by 8.5 per cent to $22.6billion in the six months ending March. It credited just over half of this growth to net new business, with the remainder due to pricing and increasing like-for-like volumes. Revenue soared by around $1.3billion to over $14.5billlion in North America thanks to higher demand from business and industry clients, and by 7.5 per cent to $7.1billion across international markets. Client retention rates also remained at above 96 per cent, while Compass registered growth in all sectors, especially sports and leisure. Combined with margins modestly ticking up to 7.2 per cent, the London-based firm's underlying operating profits rose by 11.6 per cent on a constant currency basis to $1.6billion. Compass still anticipates achieving a full-year 'high single-digit' uplift in underlying operating profits, supported by organic revenue increasing by over 7.5 per cent. Dominic Blakemore, chief executive of Compass, said: 'We have a diverse sector portfolio, wide-ranging client base and significant local purchasing scale. 'Although not immune to macroeconomic pressures, we are confident in the resilience of our business model, strength of our value proposition and ability to capitalise on outsourcing opportunities.' Since Covid-related restrictions were gradually loosened, Compass has benefited from the return of live sports events and workers commuting to their offices in far larger numbers. It has also undertaken a sizeable acquisition spree, recently buying French food services business Dupont Restauration and Norwegian company 4Service for a combined $800million. These deals followed the takeovers last year of Hoffmann in Germany and CH&CO, whose clients include Kew Gardens and Historic Royal Palaces, the charity that manages Hampton Court Palace and the Tower of London. March Crouch, market analyst at eToro said: 'While rising labour costs, tariffs, currency swings, and tightening household budgets pose problems, Compass has so far navigated these with relative ease. 'The question now is whether Compass can sustain this pace. Growth has been so strong that even the most bullish forecasts are being exceeded. And with growth already priced in, the bar for further upside is getting higher.' Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, added: 'While the economic backdrop is perhaps not the most favourable right now, Compass' services remain in demand as businesses look to reduce their own overheads. 'As such, it has quite a resilient business model, which is both flexible and has significant scale. 'Its supply chains are predominantly local, and the group remains well placed to benefit from any increase in outsourcing due to macro pressures.' Compass Group shares were 0.15 per cent lower at £26.02 on late Wednesday morning, but have nonetheless risen by around 12 per cent over the past year.
