Compass points to better profits

Compass, the world’s biggest catering company, lifted profits by five per cent after it weathered rising food costs and a flat performance in the UK.

The company, which serves an estimated four billion meals a year at 65,000 locations, was buoyed by growth in North America and in emerging markets as annual profits improved to £958m for the year to September 30.

In the UK and Ireland, where it generates 12 per cent of its turnover, underlying revenues were flat, although this was better than the three per cent reverse seen the year before. UK profits were also unchanged at £114m.

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The company is responsible for catering at Wimbledon and the US and French Open tennis championships, as well as the Cheltenham Gold Cup, the official post Oscars ball, the Brit Awards and the O2 Arena in London.

And its Letheby & Christopher sports catering arm provides hospitality staff for events such as Henley Royal Regatta and venues including the Millennium Stadium in Cardiff and West Ham United Football Club.

Compass said the picture in the UK sports and leisure sector was mixed, with hospitality at major events seeing increased spend per head but conferences and events under more pressure.

With the UK arm focusing on core activities such as workplace canteens, hospitals and schools and universities, Compass is to stop providing catering in hotels and mobile food units at sporting events.

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The loss of revenues will be around £70m and has resulted in a £55m write-down in the company’s results yesterday.

Group revenues were 9.4 per cent higher at £15.8bn after an “excellent performance” in North America saw the region’s underlying revenues grow by 7.4 per cent.