Compass, the global contract caterer, has said that whilst economic conditions in Europe continue to be difficult and overall organic revenue in its first quarter remained negative across the region, it is starting to see some signs of stabilisation.

The company said it had had a good start to the new financial year with organic revenue growth of c4%. It said that its cost reduction plans were progressing well.

It said: “We have delivered good levels of new business, the retention rate for the Group overall has remained stable and like for like revenue has continued to be positive. The underlying trends in our three regions have been consistent with the second half of 2013.”

The company said that its operations in North America had started the year well.

It said: “The underlying trends in 2013 have continued into the first quarter of 2014. We have won good levels of new business across the sectors and retention remains high. Like for like revenue remains broadly flat.”

In its Fast Growing & Emerging division, it said that the slowdown in the Australian mining sector had continued. It said: “However, elsewhere, despite economic challenges in some countries, organic revenue growth remains strong, underpinned by the continuing trend to outsourcing.”

Since 30 September 2013, it has committed c.£50m to infill acquisitions. It has also concluded the £400m share buyback that was announced in November 2012. In total, 47,061,483 shares were purchased for cancellation at an average price of 849.49 pence per share. The group announced a further £500m share buyback at its final results in November 2013, which commenced in January. As at 5 February 2014, 3.3 million shares have been purchased for cancellation for a total of £31.1m.

Former Diageo chief executive Paul Walsh will take up his new role of non-executive chairman of the company today.

The company said: “Compass has had a good first quarter and our expectations for the full year remain positive and unchanged, notwithstanding the translation impact of ongoing movements in foreign currencies. The pipeline of new contracts is encouraging and our focus on efficiencies gives us confidence in another year of delivery. In the longer term, we remain excited about the significant structural growth opportunities in both food and support services globally and the potential for further revenue and margin growth.”