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Compass serves up growth in Q1

Compass Group has reported organic revenue for the three months to 31 December 2018 grew by 6.9%.

According to the catering and support services firm, this was driven by strong levels of new business wins, continued good retention rates and bolstered by the impact of the new UK Defence contracts and a positive sporting events calendar.

Regional performance Organic revenue in North America increased by 8.0%. Growth was very good across all sectors particularly in Business & Industry and Sports & Leisure.

In Europe, organic revenue grew by 6.4% reflecting continued momentum from new business wins, notably the significant impact of Defence contracts in the UK mobilised in the second half of 2018, a beneficial Sports & Leisure calendar and continuing good growth in Continental Europe.

Organic revenue in Rest of the World increased by 2.8%, with ongoing good performance in developing markets partially offset by the run-off of the last Offshore construction project in Australia.

Currency movements, compared to the same quarter last year, had a positive translation impact on revenues and profit in the quarter of £107 million and £10 million respectively. Compass adds if  current spot rates are to continue for the remainder of the year, foreign exchange translation would positively impact 2018 revenue by £508 million and operating profit by £43 million.

In the first quarter the Group spent £197 million on acquisitions in North America. Targeted and disciplined bolt-on acquisitions, focused on its core food offering.

Following what Compass says is “an excellent start to the year” the company now expects to be slightly above the middle of its target 4-6% organic growth range for the full year, with modest margin progression.

In the longer-term, the Group concluded by saying it “remains excited about the significant structural growth opportunities globally and the potential for further revenue growth and margin expansion”. 

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