Compass profit boosted by contract wins

COMPASS Group, the world's biggest caterer, reported a 14 per cent rise in first-half pretax profit, boosted by new contract wins and an improved operating margin.

The group, which counts Chelsea Football Club, London's O2 arena, the Bank of England and the U.S. Senate among its clients, said underlying pretax profit for the six months to March 31 was 462m.

"Compass has delivered another strong performance in a challenging environment," chief executive Richard Cousins said in a statement today.

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The company said new business wins during the period included contracts to provide catering services to Visa, Nestle, Microsoft and the 2010 U.S. Open Golf Championship.

Compass, which feeds 386,000 people in over 50 countries and serves 4 billion meals each year, said revenue rose 0.9 per cent on a constant currency basis to 7.1bn, including organic growth of 0.4 per cent.

Its underlying operating margin rose 50 basis points to seven per cent as the company focused on improving operating efficiencies through supplier and product rationalisation, logistics and waste reduction.

Compass said it expected modest organic revenue growth in the second half and was continuing to look for bolt-on acquisitions.

It is paying an interim dividend of five pence, up 13.6 per cent. Compass shares opened up 2.0 per cent.

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