30th Mar 2015 06:44
LONDON (Alliance News) - Compass Group PLC Monday said it is having a strong first half to its financial year with expected organic revenue growth towards 5.5% and operating profit margin improvement of around 10 basis points.
The company said it is seeing "good levels of new business, high retention rates, and modest like-for-like revenue growth" for the half year to March 31.
Its business in North America is performing well, with revenue growth expected to be around 8%. It expects operating margins to improve by around five basis points.
Compass Group said business in Europe and Japan has "returned to growth", despite a mixed economic backdrop across the region. While like-for-like volumes are still expected to be negative, the company said they are improving.
New business wins in emerging markets are forecast to deliver around 14% revenue growth, which is helping to offset an expected decline in the Australian offshore and remote sector. Revenue in the region overall is expected to be up around 8%.
However, it said it expects the operating margin to decline about 10 basis points in emerging markets due to weakness in like-for-like volumes in some markets and pressures in the offshore and remote business.
Currency movements are forecast to boost half year revenue by GBP35 million and profit by GBP5 million. If current spot rates continue, full year revenue is expected to get a benefit of GBP323 million and profits by GBP31 million.
The company also said it intends to continue its existing share buyback programme.
"Our pipeline of new contracts is encouraging, and our continued focus on organic growth and efficiencies gives us confidence in achieving another year of delivery. In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue and margin growth," the company said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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