27th Sep 2007 07:02
Compass Group PLC27 September 2007 27 September 2007 Compass Group PLC: Trading update This statement updates investors on the Group's progress in the current year,ahead of the announcement on 28 November 2007 of its full year results to 30September 2007. Group The positive trading momentum of the first half has continued throughout thesummer period. For the full year, organic revenue growth is anticipated to bearound 5% and we expect to see a 60 to 70 basis point improvement in marginscompared with last year. As a result, the Group's performance for the year to 30September 2007 will be at the higher end of market expectations. The MAP (Management and Performance) programme is helping to drive revenuegrowth in a more disciplined way and we are now achieving a much better balancebetween new contracts and like for like growth. An intense focus on driving costefficiencies, especially overheads, is contributing to a step change in theoperating margin, accounting for around half of the overall improvement in themargin this year. This progress clearly reflects the underlying quality of thebusiness. The weakening of currencies to which we are exposed has continued, adverselyimpacting the translation of our reported financial results, as anticipated. Across the World Trading in North America has been strong. Organic revenue growth for the fullyear should be around 6% and margins are forecast to improve by 50 to 60 basispoints. Around half of the margin growth has come from a significant reductionin overheads. The remainder is the result of better like for like growth andongoing operating efficiencies across the business. In Continental Europe, organic revenue growth for the full year is expected tobe around 4%. We expect to see good margin growth of 90 to 100 basis points.Just over half of this improvement is attributable to the strong turnaround ofcountries such as France and the Netherlands. In the UK, we anticipate that revenues and operating profit will be broadly inline with last year. The fundamentals of the business remain strong and the newmanagement team are continuing to re-position the business for future growth. In the Rest of the World, we expect to see around 9% organic revenue growth forthe full year and a strong improvement in the margin of just over 100 basispoints. Just over half of this is due to good progress in lower margin countriessuch as Japan, and the mobilisation of strong new business wins gained in 2006in the remote site businesses in Australia and Latin America. ENDS Enquiries: Andrew Martin: 01932 573000 Media: Chris King: 01932 573116 Websitewww.compass-group.com Compass Group is the world's leading foodservice company. We specialise inproviding food, vending and related services on our clients' premises and wegenerated annual revenues of around £11 billion in the year to 30 September 2006. The company operates across the following core sectors of Business andIndustry (B&I), Defence, Offshore & Remote Site, Healthcare, Education, Sports &Leisure and Vending with an established brand portfolio. For more informationvisit www.compass-group.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Compass Group