Compass shares slide on news of slowing sales growth

Contract catering giant Compass Group saw its shares fall by 4.9% yesterday following an announcement that sales growth has slowed.

The fall in share price came after the world's largest catering company said in its third-quarter trading statement that it expected revenue growth to be "broadly flat" with an anticipated increase of just 1% in the months leading up to the end of the year.

Cutbacks in corporate hospitality spending, job losses among clients and shorter working hours were blamed for the slowdown.

Total revenue fell by 4.8% for the nine months ending June 2009.

Compass said in its statement that the level of new business wins and underlying retention had remained "strong and consistent" with the levels seen in the first half of the year and the last financial year.

It added: "Like-for-like revenues in education, healthcare and defence, offshore and remote have continued to see good growth.
"As anticipated, like-for-like volumes in business & industry and sports & leisure have continued to slow, driven largely by a reduction in event catering and corporate hospitality, but also reduced headcounts and shorter working hours."

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By Janie Stamford

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