Compass, the world’s biggest caterer, said revenue growth accelerated in its third quarter, boosted by new business wins and a better retention of existing business. The company, which operates in 50 countries and serves 4 billion meals each year, won contracts in the period with organisations including Oracle and the Gates Foundation in the US and Harlequins rugby club in the UK. "Whilst economic conditions remain challenging, we are encouraged by the new business pipeline and the slight improvement in retention rates," Compass said in a statement.

The company, which also counts Chelsea Football Club, London's O2 arena, the Bank of England and the US Senate among its clients, reported organic revenue growth of 5.5% on a constant currency basis in the three months to June 30, compared with a rise of just 0.4% in the first six months of the year. For the first nine months of the year, sales are running 2% higher on the year and the company said it expects the full-year figure to be more than 2.5%.

Analysts were encouraged that the accelerating sales growth was not achieved to the detriment of margins. Cost savings resulted in a 0.35 percentage point rise in the company's margin in the period. "The ongoing focus on operating efficiency should, after reinvestment, enable us to deliver further progress in the operating margin compared to the same period last year," the company said.

The focus on efficiency and costs under Chief Executive Richard Cousins has seen Compass's operating margin grow to 7% from 4.5% during his time in charge. Ultimately, the company targets a margin of 8.5%.

North American operations continued their strong performance during the third quarter, with sales up 7.6% and margin up 0.2 percentage points, while Continental Europe grew sales 1.3% and margin 0.3 percentage points. Challenging economic conditions continue to hit the UK & Ireland region, and in particular the business & industry sector. Sales in the region dipped 2.1%, though margin improved 0.25 percentage points.

NamNews - Thursday 29th July 2010

 

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