Compass Group delivers positive growth in North America and rest of the world
Compass Group has revealed positive growth in North America and Europe and an underlying revenue of £9.7b, according to its interim year results for the period to 31 March 2016.
The global foodservice company delivered organic revenue growth of 5.8% following a strong six months in North America where organic sales were up 8.3%, "good growth" in Europe with organic revenue up 3.7%, and the rest of the world grew by 5%, excluding its offshore and remote business.
The underlying margin was flat before restructuring costs and sees the company's "management and performance" programme continue to drive operating efficiencies. The company's restructuring plan, announced last July and which included proposals to reduce its cost base in the offshore and remote sector and emerging markets, is on track to deliver expected savings, the report says.
In Europe, the company's exposure to the oil and gas market in the North Sea continues to moderate like-for-like volumes, and it has endured a tough economy in France. However, momentum remains positive in Germany and the UK.
Richard Cousins, group chief executive, commented: "Compass has had another strong six months. North America continues to deliver excellent growth. Our business in Europe is growing nicely as we are rewarded for our investment in previous years to accelerate growth in the region. In the rest of the world, reasonable growth in business and industry, healthcare and seniors, education and sports and leisure was partly offset by ongoing weakness in Australia, Brazil and our offshore and remote sector.
"We continue to drive operating efficiencies around the business, which is being reinvested in the growth opportunities we see. The savings from the restructuring are starting to come through, and are offsetting the weakness in Offshore & Remote and some emerging markets. Therefore, margins pre-restructuring were flat."
He said the company's expectations for the financial year 2016 were positive and unchanged. "Our pipeline of new contracts is encouraging and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of delivery.
"In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue growth, margin improvement, as well as continued returns to shareholders through dividends and ongoing share buybacks."
Compass Group Global operates in around 50 countries, with more than 500,000 employees.
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