29th Jul 2015 06:47
LONDON (Alliance News) - Catering services and outsourcing company Compass Group PLC on Wednesday said sales growth in the third quarter was slightly slower than for the rest of the year, but said it is having a strong year, though it will book some restructuring charges related to its offshore and remote business.
The FTSE 100-listed group said organic revenue growth in the third quarter to the end of June was 5.1%, slightly slower than the 5.5% growth it registered in the first nine months of the year, with strong business wins in North America and good growth in Europe and Japan offset by a more subdued environment in its fast growing and emerging markets business and in its offshore and remote business, which primarily serves the oil and gas and mining industries.
Compass said it is in the process of reducing the cost base for its offshore and remote business and expects to book incremental restructuring costs of GBP20 million to GBP25 million a year for its 2015 and 2016 financial year. Thanks to those costs, Compass expects its full-year operating margin in 2015 will be broadly flat year-on-year.
In 2016, however, Compass said it expects the savings, along with the margin improvements made across the rest of the group, to offset the impact of the lower volumes and pricing pressures in its offshore and remote arm.
By Sam Unsted; [email protected]; @SamUAtAlliance
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