Compass enjoys sweet start as Europe improves

As growth in North America remains strong and Europe improves, catering group Compass served up a sweet start to the year, with sales growth increasingly slightly and margins expectations for the 2016 maintained.

However the impact of currency movements sours the dish somewhat, with a likely impact on full year revenue of £253m and on operating profit of £24m if foreign exchange rates remain as they are.

Revenue in the three months to the end of the year rose 5.9%, edging up from 5.8% in the last full year, with like-for-like revenues increased on the back of modest pricing and some volume improvement.

Organic sales growth in North America was 7.9%, the same as in the last full year; organic growth Europe perked up to 3.6% from the 1.9% last year and 3% in the second half as trends continued to improve and new business wins have been strong in the UK and the Mediterranean countries.

Revenue from the Rest of World region slid to 3.6% as commodity related business suffered from continued weakness and a challenging environment in some emerging markets, dragged on robust growth in Spanish speaking Latin America.

Management said margin expectations were unchanged, reiterating their focus on driving operating efficiencies around the business, part of which is being reinvesting in the growth opportunities we see across the group.

"The previously announced restructuring programme in the Offshore & Remote sector and in some emerging markets is progressing well and is on track to deliver the expected savings," Compass said.

The full year outlook remains positive too, with growth in North America "strong", Europe "improving", and the challenges in the Rest of World being "managed".

"In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue and margin growth."