Compass, the world’s largest foodservice group, has said that its expectations for the full year remain positive and unchanged despite challenging economic conditions in Europe continuing to put pressure on its like-for-like volume growth.
The group said that thanks to strong growth in North America and its “fast growing & emerging regions”, revenue increased by 7.8% in the quarter compared to the same period last year, with organic revenue growth of 5.7% (5.3% for the nine months to 30 June 2012). Operating profit margin in the third quarter was slightly above the same period last year.
It said that economic conditions in Europe, and particularly in southern Europe, were difficult and as a result the group saw increasingly negative like for like volume growth during the quarter. In countries, such as France and Spain, new business was healthy but like for like volume came under increasing pressure.
The company said it was working hard to identify ways to reduce the cost base further and was encouraged by the opportunities it sees to drive greater efficiencies across the region.
The group said it had invested £189m in acquisitions in the financial year to date and that its pipeline of business looked encouraging.
During the period, the group continued with its £500mshare buyback programme. As at 25 July 2012, 40 million shares had been purchased for cancellation for £256m, and it said that the programme remained on track to complete within the calendar year.
The company said: “As we look out to the remainder of the year, we expect to see continued good performances in these regions and the pipeline looks encouraging. However, the challenging economic conditions in Europe will continue to put pressure on like for like volume and we are working hard to identify more efficiencies to manage this.
“Overall, we believe Compass is very well placed to capitalise on the significant structural growth opportunities in both food and support services around the world. We have an excellent business in North America and we are expanding our presence in the Fast Growing & Emerging markets, which will remain a focus for future growth. We will drive further cost efficiencies and this underpins our expectation of delivering margin growth over the medium term.”
