Compass expects healthy boost to profits

27 September 2007 by
Compass expects healthy boost to profits

Compass Group today said 12 months of improving its margins and the retention of existing business will lead to a healthy boost in profit when it announces full-year results in November.

In a trading statement, the world largest caterer said the positive trading of the first six months had continued into the second half of the year with organic turnover growth for the full year expected to be around 5%.

Compass said it also expected to deliver improved profit margins in the 12 months to 30 September with a 60 to 70 basis point increase.

In the first six months of the year a similar improvement in basis points boosted the caterer's operating margin to 5.1%.

Compass said that thanks to its Management and Performance programme it was achieving a much better balance between growth through new contract wins and retention and development of existing deals.

While organic turnover growth in North America should be 6%, around 4% in Continental Europe and 9% in the rest of the world, the company said it expected UK growth and operating profit to be similar to last year's full-year totals of £1.96b turnover and £115m operating profit.

Caterer the company's UK operations would be revitalised and ready to face the challenges of the rapidly changing contract catering market within months after a series of management and structural changes.

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By Chris Druce

E-mail your comments to Chris Druce](mailto:chris.druce@rbi.co.uk?subject=Compass expects healthy boost to profits) here.

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