Compass Group, the international caterer, has reported a 1% drop in pre-tax profit to £575m for the six months to 31 March, but backed its positive expectations for the full year while cautioning that pressure on volumes is likely to continue in Europe and Japan.
The group, which saw overall revenue increase 4.1% to £8.8bn, said that economic conditions in many parts of Europe remain difficult. Overall, revenue in Europe & Japan for the first half totalled £3.1bn (2012: £3.2bn), an organic decline of 3.6% (a decrease of around 2.6% excluding the negative impact due to the timing of Easter).
The company said that as expected, like for like volume had declined by around 2.5% in the first half across Europe. It said: “We have again seen differing trends across the region.”
It said that in the UK the negative trends in like for like volume in some sectors were more than offset by an increased number of sporting events in the first half, notably the autumn Internationals at Twickenham.
It said that its rate of retention had been slightly reduced because of the increased number of business closures in Europe and its decision to exit certain contracts that have become uneconomic.
Richard Cousins, group chief executive, said: “Compass has started the year well. We have generated organic revenue growth of over 4%, reflecting the strength of the performance in North America and Fast Growing & Emerging. Economic conditions in Europe & Japan remain challenging but we are executing the action plans we announced last year and improving our operating efficiency significantly.
“This, combined with ongoing efficiencies across the business, has delivered a 15 basis points increase in the operating margin. Looking forward, I remain positive about the significant structural growth opportunities in our markets and the potential for further revenue and margin growth.”
