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A return to the office on Mondays helped boost profits at Compass, even as the world’s largest catering group exited from China following the slowdown in investment of international companies.
Chief executive Dominic Blakemore said higher office attendance on Mondays, particularly in North America, helped operating profit grow nearly 20 per cent for the six months to the end of March and allowed the company to raise its full-year guidance.
“Mondays [have been] recovering quickly in the last six months or so,” Blakemore told the Financial Times. The FTSE 100 company, which provides food for work and school canteens in about 30 countries, is “absolutely” seeing a benefit from US financial institutions pressuring their employees to come back to the office, he added.
North America accounts for about 70 per cent of the group’s revenues. The UK and Europe were catching up with the return to office trend, he said.
Some Wall Street groups, including Goldman Sachs, require bankers to be in the office five days a week. This is partly because they are finding it challenging to train junior workers if their managers are not with them in the office.
“We talked about the importance of presenteeism during more turbulent economic times [and] of the apprenticeship model and learning for people,” Blakemore said. “I think all of those factors are playing in and they’ll continue to do so,” he said, adding he expects a return to Fridays in the office to be “slow and steady”.
Compass posted an operating profit of $1.47bn for the half-year, up 19 per cent, while revenue rose 11 per cent to $20.9bn. It now expects full-year operating profit growth towards 15 per cent, up from an earlier forecast of 13 per cent.
Despite this growth, Compass also revealed on Wednesday that it had exited four countries including mainland China over the past six months. It is also planning to exit Brazil.
Compass said the decision to withdraw from China, where it mainly served manufacturing plants and the offices of international companies, was because international clients were downsizing their operations or relocating outside the country.
“We have seen the onshoring of manufacturing back into domestic home markets or into other Asian countries.” Blakemore said. “A number of those firms either [are] investing less or or relocating their manufacturing.”
Rising labour costs in China, the trade dispute with the US and concerns about China’s political and economic stability have driven foreign manufacturers to scale back businesses in the country.
In 2023, investment in China by companies based abroad was down 80 per cent year on year, sinking to the lowest level in 30 years, according to Chinese government official data.
China, combined with the other markets Compass withdrew from, contributed only 2 per cent of group revenues. Despite being present in China for 20 years, the business achieved only £100mn in annual revenues, Blakemore added.