Compass Group, the global contract caterer, said that it anticipates full-year organic revenue growth of 4%.
The company said that it had delivered another good performance in the fourth quarter of the financial year with further strong growth in its North America and Fast Growing & Emerging regions and a continued improvement in Europe & Japan.
It said that organic revenue growth in the year had been driven by strong levels of new business wins, good retention rates and inflationary price increases.
The group said: “Conditions in Europe & Japan continued to improve throughout the year. Increasing rates of net new business and a healthy sales pipeline reflect the investments we have made in our sales and retention teams. The contract exits related to the 2012 cost reduction programme have now been completed and volumes, although still negative overall, are declining at a slower rate than the same period last year. For the full year, we are encouraged by the expected decline of 1.5%, which is half the rate of the previous year. We expect the full year operating profit margin to increase by 20 basis points compared to last year.”
It said it had committed around £115m to infill acquisitions in the financial year to date. In the third quarter, it also received US$40m (approximately £23m) relating to the disposal of a small non-core support services business in North America.
The £500m share buyback programme announced in November 2013 was resumed on 31 July 2014 following the completion of the £1bn Return of Cash. As at 26 September 2014, 18.4 million shares have been purchased for cancellation for £174.5m, and the programme remains on track to complete during 2015.
The company said: “Compass has had a good year, delivering solid organic revenue growth and further margin progression. Our expectations for the full year therefore remain positive and unchanged, notwithstanding the translation impact of ongoing movements in foreign currencies. For the full year, we expect North America and Fast Growing & Emerging to deliver healthy levels of organic growth and we are encouraged by the improvement seen through the year in Europe & Japan.
“Looking to the longer term, we remain excited about the significant structural growth opportunities in our markets globally and the potential for further revenue and margin growth.”
