Compass Group results ahead of expectations

Caterer Compass Group has revealed its performance in the first five months of the year is ahead of expectations, pleasing City analysts.

The world’s biggest caterer said, ahead of its interim results on 16 May, that organic revenue growth was expected to be mid digit with a significant improvement in profitability (on an underlying basis up 40 basis points year-on-year).

Compass credited its Management and Performance programme for stimulating like-for-like revenue growth and achieving cost reductions.

However, a weakening of several major currencies means the caterer will be £20m out of pocket for the period, impacting operating profit.

Also, while profitability has been improved at operations around the world it remains stubbornly stagnant in the UK, as does revenue.

In response Compass said: “We have continued to strengthen the management team and are working hard on the challenge of re-focusing the business for the medium term.”

Analysts at broker Merrill Lynch gave the thumbs up saying “given the challenge of turning around such a large and complex business this is certainly an impressive start by new CEO Richard Cousins.”

Compass said it expected to complete the sale of its vending machine business Selecta this summer.

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By Chris Druce

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