Compass Group chief executive Mike Bailey is to step down from the company.
The world’s largest caterer made the announcement today, together with a trading statement, which revealed the company’s intention to sell its travel concession business SSP.
Bailey, who will leave when new chairman Roy Gardner takes over next year, said: “Whilst in the short term the company has been through a challenging period, particularly in the UK, I am satisfied that we have taken the necessary action and that a platform has been established from where the company can move forward again.”
Compass shares fell 8.4% at the news to 213.2p.
Foodservice consultant Chris Stern said he was not surprised by Bailey’s departure.
“Bailey leaving is yet another change at Compass. The old guard are on their way out and the company seems to be having a complete rethink about the way it does business, which is probably a sensible move,” said Stern.
He was less sure about the sell-off of SSP, which includes the group’s Caffe Ritazza travel outlets, the Moto service station business and Burger King franchises.
He added: “It seems slightly strange because SSP was trading successfully. I would have thought a link to the commercial world would be beneficial.”
Compass said the sale would allow it to focus on its core business of contract catering and grow its support services business.
Proceeds from the sale will reduce the group’s debt and strengthen the group’s balance sheet and return cash to investors.
Compass said that it expected turnover growth for the year to 30 September to be 6% while operating profit was expected to be £710m.