Compass Group this morning said trading in the first five months of the current year was ahead of its expectations, and the strong performance seen in the first three months of 2007 has continued into the second quarter.
As a result the firm said it expects to see organic revenue growth of just over 5% for the half year and should deliver around 50 basis points of margin improvement compared with the same period last year.
Compass described trading in North America as “strong”, with prospects for “good organic revenue growth for the half year of around 7%”.
The organic revenue growth rate in Continental Europe continues to improve and for the half year is expected to be around 5%, with good performances in Spain, Turkey, Eastern Europe and the Nordic countries.
In the UK the firm said it expects revenues and margins to be broadly in line with last year. The education sector continues to make solid progress. Compass said it it “making good progress with unit labour and overhead efficiency plans and food cost is being well managed through supply chain efficiencies, menu planning and price increases.”
The firm forecasts around 9% organic revenue growth for the half year in the rest of the world, driven by positive trends in South America, UAE and its remote site businesses. The Japanese business “continues to make good progress”.
The group's £1bn share buy back programme is now complete. Between 1 October 2007 and 19 March 2008, the company repurchased for cancellation 89 million ordinary shares for a total consideration of £280m. This brings the total number of shares repurchased since the share buy back programme began in 2006 to 328 million for a total consideration of £1bn.
Looking forward, it said: “a combination of good market growth from a diversified geographical and sector base, improving working capital management, capital expenditure control and clearly identified cost efficiencies, leaves us confident that this trend will continue through the second half of the year.
The statement updates investors on the group's progress in the current year, ahead of the announcement on 14 May 2008 of its half year results for the six months to 31 March 2008.
