Compass delivers strong start, but warns of FX hit

Catering giant Compass has delivered a strong first quarter, with a decent performance across all sectors and regions pushing organic revenue growth ahead of full-year guidance, but warned that currency movements could put a dampener on annual results.

The company warned that, if current foreign exchange rates persist for the remainder of the year, they would have a $558m negative impact on revenues, compared with a hit of just $69m last year. The impact on operating profits would be $36m, up from $16m registered in the year just gone.

Nevertheless, Compass said it was "pleased with the strong start to the year [...] supported by continued strong client retention".

Organic revenues increased by 9.2% year-on-year in the first quarter ended 31 December, ahead of the full-year guidance of at least 7.5%, helped by positive outsourcing trends.

"We are an even more focused business and are leveraging investments in capex and M&A to support future growth, as we maintain our strong track record of delivering long-term, compounding shareholder returns," the company said.