Compass Group, the world’s largest caterer, remains confident about its prospects in the coming months despite food inflation, after a successful start to the year.
In an interim results statement today, the catering giant, which serves four billion meals annually, said it continues to see food basket inflation of 4-5%.
The rate is even higher for rice, dairy and pasta, although these goods make up just 10% of the group’s spend on food.
However, re-engineering menus, using its large purchasing power to strike better deals and cutting back on products and suppliers has helped Compass mitigate food inflation.
As a result the caterer, which won £15m of new business in the six months ended 31 March, improved its operating margin to 5.7% (2007: 5.1%). Pre-tax profit increased 29% to £289m with group turnover 5.2% higher at £5.6b.
Sir Roy Gardner, chairman of Compass Group, said: “After more than two years of disposals, country exits, restructuring and the roll out of MAP (management and performance programme) across the business, it is clear that our strategy is delivering value for our shareholders.
“We believe that we have a well balanced and sustainable business model. We are confident about the second half of the year and the future potential for the business.”
Compass increased its dividend to shareholders and announced it would buy back £400m of shares during the next 18 months.
Last week Compass Group’s fine dining arm Restaurant Associates announced a tie-up with Gordon Ramsay Holdings.
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By Chris Druce
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