8th Feb 2008 07:00
Compass Group PLC08 February 2008 8 February 2008 Compass Group PLC AGM Statement and Interim Management Statement Compass Group PLC is today issuing its first Interim Management Statement aheadof its Annual General Meeting to be held at 11:00a.m. today at the QueenElizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE.At this meeting shareholders will be provided with the following InterimManagement Statement, on the Group's performance for the first three months ofthe current year. Group Compass has had a strong first quarter with global revenues increasingorganically in line with growth levels for last year. Margins are continuing toimprove and operating profit is running well ahead of last year's first quarterand marginally ahead of expectations. Cash flow conversion remains very good. We have embedded the MAP programme deeper throughout the whole organisation andthis is continuing to drive increased focus on like for like growth and costefficiencies, resulting in improving margins. The focus on working capitalmanagement and control of capital expenditure is improving free cash flow. TheGroup has again delivered good quality organic growth by achieving a betterbalance between like for like growth and net new contract wins. We are managing the impact of food cost inflation through rigorous applicationof the MAP framework - particularly in the key areas of purchasing and supplychain efficiencies; unit cost efficiencies including menu re-engineering; andclient and consumer pricing. North America Our broad mix of clients across many sectors of the US and Canadian economy ishelping to drive strong organic revenue growth in the first quarter at similarlevels to last year. In particular, increased participation and healthy eatingprogrammes have again driven like for like revenue in Chartwells, our educationbusiness. Crothall, our support services business, continues to grow as we focuson cross selling additional services to existing customers. The remote businessin Canada is performing well in the year to date as a result of the increasedactivity in the extractive industries. Close attention to detail is ensuring that food cost inflation is being wellmanaged and this, combined with the positive revenue trend, is ensuring thatfirst quarter margins and operating profits are comfortably ahead of last year. Continental Europe Growth in revenues in Continental Europe has been gradually increasing over thelast 18 months and we have seen this trend continue in the first quarter. Spainand the Nordic region remain the drivers of the improvement. In Spain, growth inall sectors has been strong with a good balance of new business wins and likefor like growth and the Nordic region continues to benefit from the highactivity in the oil and gas industry. Good progress is being made in all aspects of MAP and this is improving margins.First quarter margins and operating profits are well ahead of last year. UK As anticipated, revenues and operating profit remain broadly in line with thesame period last year. Performance in education, which had stabilised by the endof last year, continues to make steady progress and Restaurant Associates, ourfine dining business, and B&I and Healthcare are all performing in line withlast year. In-unit labour and overhead efficiency improvement plans areprogressing well and food cost inflation is being well managed. Rest of the World Healthy organic revenue growth in the first quarter, in line with last year, hasbeen driven by positive trends particularly in Latin America, South Africa, UAEand our remote businesses which operate throughout the region. The remote sitebusiness continues to perform well on the back of food and support serviceswhich are provided particularly to the energy and extractive industries. Marginsare well ahead of last year with good progress in the geographies listed aboveas well as in Japan and Australia. Brazil Acquisition The Group is pleased to announce that it has exchanged contracts with itspartner Accor SA to acquire their entire 50% stake in GRSA, the Group's 50%owned Brazilian joint venture contract catering business, for a total cashconsideration of Brazilian Reals 305m (approximately £88m). The revenues for theBrazilian business (100%) for the year to 30 September 2007 were £267m, of which50% were consolidated. Completion will be subject to a number of routineconditions. Share Buy-Back Programme The Group's share buy-back programme has continued. Between 1 October 2007 and 5February 2008, the Group repurchased for cancellation 65 million ordinary sharesfor a total consideration of £203 million, bringing the total number of sharesrepurchased since the share buy-back programme began, to 304 million for a totalconsideration of £923 million. Other than in relation to the acquisition of the Brazilian business and theongoing share buy-back programme referred to above, there has been nosignificant change in the financial position of the Group in the period sincethe end of the first quarter. Ahead of our interim results announcement on 14 May 2008, there will be apre-close trading update issued at 7a.m. on 27 March 2008. ENDS Enquiries: Analysts: Andrew Martin: 01932 573000 Media: Chris King: 01932 573116 Note to Editors: Website www.compass-group.com Compass Group is the world's leading foodservice company. We specialise inproviding food, vending and related services to our clients' premises and wegenerated annual revenues of around £10 billion in the year to 30 September2007. The company operates across the following core sectors of Business andIndustry (B&I), Defence, Offshore and Remote, Healthcare, Education, Sports andLeisure and Vending with an established brand portfolio. For more informationvisit www.compass-group.com. This Interim Management Statement is prepared for and addressed only to theCompany's shareholders as a whole and to no other person. The Company, itsdirectors, employees, agents or advisors do not accept or assume responsibilityto any other person to whom this Interim Management Statement is shown or intowhose hands it may come and any such responsibility or liability is expresslydisclaimed. Certain information included in this Interim Management Statement is forwardlooking and involves risks and uncertainties that could cause the actual resultsto differ materially from those expressed or implied by forward thinkingstatements. Factors which may cause future outcomes to differ from thoseforeseen in forward looking statements include, but are not limited to, generaleconomic conditions and business conditions in Compass Group's markets; exchangerate fluctuations; customers' and clients' acceptance of its products andservices; the actions of competitors; and legislative, fiscal and regulatorydevelopments. All statements in this release are based upon information known tothe Company at the date of this report. The Company undertakes no obligation topublicly update or revise any forward looking statement, whether as a result ofnew information, future events or otherwise. A copy of this release, together with all other recent announcements can befound on Compass Group's website at www.compass-group.com. Copies of thepresentation given to institutional investors and analysts are also available atthis site. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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