Compass points way forward with revenues lift

Compass said organic revenues fell 1.7 per cent in its first quarter, nearly half the 3 per cent drop seen in the previous three months.

The Surrey-headquartered group confirmed "encouraging" trends in the two corporate catering markets that have been most affected by the recession – business and industry and sports and leisure.

Compass has provided outdoor catering for the Great Yorkshire Show.

Shares in Compass rose as investors welcomed signs of a turnaround. The group said: "Compass has had a good start to the year."

It added: "The trends in organic revenue have improved in all four of our geographies in the first quarter of the year compared to the fourth quarter of 2009.

"We continue to see strong growth in new business both in foodservice and in our fast growing support services business and retention rates remain high."

Recent new business wins include contracts for corporate giants such as Aviva and Visa, according to the firm.

Education, healthcare and defence, as well as offshore and remote sites have been the best performing sectors in the first quarter,

with "solid" rises in like-for-like sales.

But Compass said the tough economic conditions continued to affect catering spend in the business and leisure sectors.

Recession pressures saw companies rein in hospitality and catering needs, although Compass has said the increased need for outsourcing among firms should provide an ongoing revenue stream.

It has so far maintained profits in the face of falling sales, reporting a 37 per cent leap in pre-tax profits to 773m for the year to September 30, which was better than most analysts had expected.

Kevin Lapwood, analyst at Seymour Pierce, said the figures were a "marked improvement".