Compass shifts its trading to dollars

2026-02-11 06:47:58

This report is taken from this week’s CNBC UK Stock Exchange newsletter. Like what you see? You can subscribe here.

Mission

compass He is this rare beast — A British company that is a world leader in its field.

The world’s largest catering company, which annually delivers 5.5 billion meals to schools, colleges, workplaces, hospitals and sports venues in more than 25 countries, is a well-run company.

Accordingly, its trading updates tend to be unexciting, routinely consisting of news of organic sales growth, margin improvements and – with the gradual outsourcing of workplace catering operations around the world – new business wins.

However, last week’s update brought something even more surprising as Compass announced that, effective April 1, it will change the currency in which its shares are traded from British pounds to US dollars.

The company explained that after reporting in dollars since October 2023, this measure will align the trading currency of its share price with its reporting currency, “reducing foreign currency fluctuations in the share price and simplifying the investment case for global investors.”

A large-scale specimen of the new £20 banknote featuring the late British painter JMW Turner during the design launch of the new note at Turner Contemporary Gallery in Margate, southeast England, UK, on October 10, 2019.

Leon Neal | AFP | Getty Images

Cue how Compass — which derives about three-quarters of its revenue in dollars — fares — It could be the next major British company to abandon London and move to the New York Stock Exchange.

Protests by Compass that it will continue to pay dividends in sterling, unless shareholders choose to receive them in dollars, have fallen on deaf ears.

In fact, Compass was benefiting from a relatively recent change in the so-called “fundamental rules” governing membership of indices overseen by FTSE Russell, part of LSEG, which owns the London Stock Exchange.

Announced in March 2025, and entered into force last September, it allows companies whose shares are traded in dollars or euros “to consider the possibility of inclusion in the FTSE UK index series.”

In doing so, London has shown much greater resilience than some other major financial centres. For example, the New York Stock Exchange insists that all stocks listed on the NYSE are priced, traded and settled exclusively in dollars.

The first company to benefit from the rule change, in January of this year, was… InterContinental Hotels Groupthe parent company of the Holiday Inn and Crowne Plaza hotel brands, which derives approximately 80% of its revenues and operating profits in dollars. If anything, it’s more British than Compass, which has a 249-year history in the country. It is also proud to register the first trademark in the United Kingdom — The famous red bass triangle — In 1875.

“The accounts were not acceptable.”

In a sense, changing the currency in which a company’s shares are traded is the next logical step in a process that began many years ago.

When companies were allowed to publish their reports and accounts in currencies other than sterling, many began to do so. The three largest companies in the FTSE 100 index by market capitalization — HSBC, AstraZeneca and coincidence – All reports are now in dollars. Unileverthe fourth largest, reports in euros. Another 20 companies in the top 20 that report in dollars include miners Rio Tinto, Glencore and Anglo Americana major oil company baby And the World Bank Standard Chartered.

It is not a recent development. As long ago as 1989, car rental company Avis Europe began accounting in the old European Currency Unit (ecu), the artificial currency that later evolved into the euro.

This move caused some complications for the business at the time. When Avis Europe first submitted its report and accounts for 1990-91, the UK authorities refused to accept them, Alun Cathcart, chairman and chief executive, told the annual meeting of the European Banking Association in Copenhagen in June 1991.

He recounted: “We were asked to produce coins and banknotes, and if we could not do that, the accounts were not acceptable.

“They were willing to accept a report in Icelandic krona or Australian dollars, but not in European currency.”

When Avis Europe floated on the stock market in April 1997, it became the first London-listed company to report in the European currency.

But at the time, Avis Europe was far from that. Other British companies have only made this shift relatively recently. Shell began reporting its results in dollars only at the beginning of 1998, expressly to encourage meaningful comparisons with its US rivals, and BP followed suit a year later.

In the same sector, BG Group, the gas exploration and production company that was spun off from the old British Gas and acquired by Shell in 2015, began reporting in dollars in 2009.

All were beaten by Rio Tinto, which has been listed in London longer than any other major global mining company. The US currency was embraced after the merger of London-listed Rio Tinto Zinc (RTZ) in late 1995 with 49%-owned Australian company Conzinc Riotinto.

So it’s surprising that last week’s Compass announcement has caused such a tangle of pearls. Perhaps the biggest surprise is that British multinationals love it GlaxoSmithKline, British American Tobacco Company, Rolls Royce, Diageo, Relex and Reckitt BenckiserAlthough they earned most of their money abroad, they remained loyal to the good old pound.

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Need to know

Recent political showdown in the UK threatens to lay down the ‘Sword of Damocles’ Jordan Rochester, head of FICC strategy at Mizuho EMEA, said in a note on Monday about the country’s bond market. The prospect of a leadership challenge that could upend the policy course set by Starmer and his finance minister, Rachel Reeves, poses a major challenge. High risks for gilt investors.

Jeffrey Epstein sparked a political crisis that threatens the UK government. The release of more Epstein files last week sparked a chain of events that has left British Prime Minister Keir Starmer unstuck He fights for his political lifeAlthough he never knew the late financier and sex offender.

China criticizes UK expansion scheme Hong Kong residents can apply for the British National Overseas Visa, or BNO visa, which is called “Despicable” and “reprehensible.” The UK’s move comes after a Hong Kong court sentenced pro-democracy media mogul Jimmy Lai to prison 20 years in prison Under the National Security Law.

Quote of the week

Labor appears to be equally confused and fearful of the bond market.

— Callum Pickering, chief economist at Bill Hunt

In the markets

the FTSE 100 index Its trading declined over the past week, closing Tuesday at 10,353.84, compared to 10,402.34 a week ago. The leading stock index in Britain ended yesterday’s session down by about 0.3% during the day.

British fairyMeanwhile, it rose slightly against the dollar this week, trading at $1.3665, up from $1.3650 last Wednesday, as the yield on the benchmark 10-year British government bond – also known as… gilts It decreased during the same period, and ended Tuesday at 4.495%, compared to 4.552% a week ago.