By Michael Susin

Compass Group PLC reported on Monday a better-than-expected pretax profit increase for fiscal 2022 driven by a robust recovery on volumes and new business growth amid lower costs, and announced a further capital return to shareholders as it expects further growth in fiscal 2023.

The U.K. catering contractor said it will launch a further share buyback program of up to 250 million pounds ($297.2 million) in the first half of fiscal 2023, bringing the total return program to GBP750 million.

The board has also declared a dividend of 31.5 pence a share, compared with 14 pence a share in fiscal 2021.

The company made a pretax profit of GBP1.47 billion for the year ended Sept. 30 from GBP464 million reported in fiscal 2021. This compares with a consensus forecast of GBP1.32 billion taken from FactSet and based on seven analysts estimations.

Revenue rose 42.5% to GBP25.5 billion from GBP17.91 billion a year earlier, reflecting the reopening of sectors and improved client retention. Underlying operating margin was 5.9% compared with 4.5% the previous period.

"The group's performance surpassed our expectations both in terms of net new business growth and base volume recovery, with Business & Industry now operating above its pre-pandemic revenues. The strong growth trends seen in the first half have continued, with net new business accelerating through the year in all our regions," Chief Executive Dominic Blakemore said.

"Our clients are continuing to face operational complexities and inflationary pressures, which are driving increased outsourcing, and we are successfully capitalizing on the resulting growth opportunities," Mr. Blakemore added.

The company said it expects underlying operating profit growth for fiscal 2023 to be above 20%, to be delivered through organic revenue growth of around 15%, and underlying operating margin above 6.5%.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

November 21, 2022 02:41 ET (07:41 GMT)

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