COMPASS, the world's biggest catering firm, has posted an increase in profitability today despite wrestling with continued high food inflation.
The group said its profit margin rose to 5.7 per cent during the first half to March 31, compared to 5.1 per cent for the previous year's period.
Compass, whose UK clients include Manchester United, the Bank of England, and Wimbledon's All-Englan
d Lawn Tennis club, also enjoyed organic sales growth of 5 per cent, taking total revenues to £5.6 billion.
Compass said its "basket of goods" was costing up to 5 per cent more but is is countering the higher bills by using fewer suppliers, re-jigging menus and passing on the increased costs to customers.
The firm reported pre-tax profits of £281 million, up more than a quarter from the previous year and ahead of City estimates.
Compass, which spends £3.5 billion on food every year, said: "We continue to see market inflation for our basket of goods of 4 per cent to 5 per cent.
"Although the increases occurring in dairy, rice and pasta prices have been at significantly higher rates, these account for only about 10 per cent of the group's spend on food."
The firm highlighted its contract retention rates of 94 per cent, and its balanced geographical spread as well as exposure to different business sectors. Earlier this month its top end UK catering business,
Nearly half of Compass' business comes from North America, which saw 7 per cent organic growth during the first half.
UK sales were £965 million, up 1 per cent, with the rest of Europe contributing £1.48 billion, 4 per cent ahead. The rest of the world weighed in with £869 million of sales, 9 per cent ahead.
Shares rose more than 2 per cent following the results.
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