27th Sep 2006 07:02
Compass Group PLC27 September 2006 27 September 2006 Compass Group PLC: Trading Update This statement updates investors on the Group's progress in the current year,ahead of the announcement on 29 November 2006 of its full year results to 30September 2006. Trading The Group has continued to trade in line with expectations for the year to 30September 2006 and our target of £50 million of overhead savings has beenachieved. As we strengthen our financial and operational disciplines and addresslower margin contracts, we continue to expect to see a lower level of overallrevenue growth in the near term. Trading in the North American business remains strong across all sectors,particularly within Business & Industry, Sports & Leisure, Healthcare andEducation. Levels of client retention have been high and the Group expects highsingle digit underlying revenue growth for the second half of 2006, with secondhalf operating margins in line with last year. In the UK, the business is showing positive signs of stabilising and the Groupremains confident it will deliver a similar level of revenue and overallprofitability to the prior year, as indicated in our interim resultsannouncement. Progress has been made in the Education sector where the Group hasbeen heavily involved in the drive to deliver meals to the Government's newnutritional standards. Overall, Continental Europe has performed in line with our previous guidance.Second half revenues are expected to be in line with the prior year and theGroup still anticipates a similar level of overall profitability and margin to2005. We are continuing to see good trading in Spain, Eastern Europe,Scandinavia and Germany, whilst trading conditions remain difficult in Italy. In the Rest of the World businesses, the Group has successfully concluded theexit from its Middle East military operations. The ongoing businesses continueto perform well, particularly in Australia and Latin America, with full yearprofitability expected to be slightly ahead of last year. Compass share buyback progress Following the completion of the sale of its Travel Concessions business, SelectService Partner (SSP) in June 2006, the Group has commenced the announced £500million share buyback programme. As at 26 September 2006, 54.5 million shareshave been repurchased at a cost of £139.6 million. Compass Group announces todaythat it has entered into an irrevocable and non-discretionary arrangement withMerrill Lynch International, to repurchase on its behalf and within certainpre-set parameters, ordinary shares in the Company for cancellation during theperiod commencing on 2 October 2006 and ending on 24 November 2006. Thisarrangement is in accordance with chapter 12 of the Listing Rules and theCompany's general authority to repurchase shares. ENDS Enquiries: Andrew Martin Compass Group PLC 01932 573000 Website www.compass-group.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Compass Group