Catering group's profits well ahead of expectations
Apr 1 2009 by Iain Laing, The Journal
COMPASS, the world’s biggest catering group, has served up a boost to investors by revealing profits have been running well ahead of expectations.
The company, which has contracts with the Bank of England, Asda and the Royal Mail, said new business wins and its flexible cost base had helped it cope in the increasingly difficult economic conditions. Shares in the FTSE 100 Index stock jumped by more than 6% after Compass described the six months to March 31 as a period of good progress.
Growth was driven by the education and healthcare sectors, offsetting tougher trading in business and industry and the sports and leisure segments. Group revenues are expected to be around 2.5% higher for the first half, helped by a good performance in North America.
In the United Kingdom, revenues are likely to be 4% lower as a result of snow disruption in February, extended Christmas shutdowns and the impact of some factory closures. Overall, it said the UK arm was performing well in a difficult environment, buoyed by growth in healthcare, education and the defence and offshore sectors.
Extensive restructuring of the business has also enabled it significantly to improve efficiency of the UK division, resulting in higher operating profits. In terms of contract wins, Compass said it had extended its relationship with National Grid while it also announced a deal with the Jockey Club to provide food services at all 14 of the organisation’s racecourses.
Compass generates revenues of more than £11bn a year through operations in 55 countries.
