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Compass Group moves in a ‘positive’ direction

Compass-logo-fmj-may-13Catering and support services Group, Compass, has announced a strong performance in its interim year results for the six months ended 31 March 2016.

Revenue for the whole Group increased by 5.8 per cent on an organic basis. North America saw ‘another strong six months’ with organic sales up 8.3 per cent. There was also ‘good growth’ in Europe with organic revenue up 3.7 per cent, whilst the rest of the world grew five per cent (excluding offshore and remote).

New business wins for the Group accelerated to nine per cent driven by a strong performance in consumer sales and marketing initiatives. The Group’s retention rate remained at 94.5 per cent, reflecting the Group’s ongoing focus and investment. This includes extending its global contract with JLL to provide a range of food services to HSBC until 2021.

Expectations for 2016 remain positive and unchanged.

The Compass Group has operations in around 50 countries, with North America (56 per cent of Group revenue) likely to remain the principal growth engine for the Group. The fundamentals of its businesses in Europe (28 per cent of Group revenue) are good and the Group sees many opportunities to drive growth in both its revenue and margins. The rest of the world (16 per cent of Group revenue) offers excellent long-term growth potential, with its largest markets being Australia, Japan and Brazil. India and China also have strong growth potential over the long-term.

Richard Cousins, Group chief executive, said:

“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 Rest of World, reasonable growth in Business & Industry, Healthcare & Seniors, Education and Sports & Leisure was partly offset by ongoing weakness in Australia, Brazil and our Offshore & Remote sector. We continue to drive operating efficiencies around the business, which is being reinvested in the growth opportunities we see.

“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.”

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