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Q3 organic revenue growth beat expectations at 10.3%

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Shares rise 3% to top of FTSE 100

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Compass says pricing has moderated, in line with inflation

(Rewrites paragraph 1, adds shares in paragraph 2, analyst in

paragraph 8)

July 23 (Reuters) - Caterer Compass raised its

annual profit and revenue forecasts for the second time this

year on Tuesday, after third-quarter revenue beat expectations

as more people eat in office canteens rather than in pricier

high-street restaurants.

Shares in the FTSE 100-listed company rose 3% in early

trade to the top of the London blue-chip index.

The world's largest catering group lifted its annual

underlying operating profit growth forecast to above 15% and

organic revenue above 10% for the fiscal year ending September.

It had previously said profit and revenue would rise towards 15%

and 10%, respectively.

Compass Group ( CMPGF ) had emerged as a much bigger business from the

pandemic as companies turned to outsourcing companies to meet

their canteen needs, although it has had to contend with high

food prices and increased labour costs.

However, as inflation eases, pricing has moderated, Compass

said.

The British company, which caters staff and students at the

likes of Microsoft ( MSFT ), Shell and Harvard Business

School, reported a 10.3% rise in organic revenue for the quarter

ended June 30.

Analysts had expected an organic revenue growth of 9.5% for

the quarter, according to a company-supplied consensus.

The Chertsey, UK-based company, which operates in more than

30 countries, has benefited from its lower-cost products

compared with the more expensive high-street that has weighed on

parts of the broader restaurant sector, analysts at RBC Capital

Markets said in a note.

In the past eight months, Compass has exited several

markets, including China, Brazil, the United Arab Emirates,

Argentina and Angola.

France's Sodexo, the world's second-largest

caterer behind Compass, had reported slower quarterly sales

growth earlier this month, citing a slowdown in China.