Strong half brings more hope for Compass

Catering giant Compass boosted hopes for full-year sales yesterday after a strong second half but said its UK business was still lagging behind.

The Surrey-based firm, which provides catering at famous venues including Chelsea Football Club and the Wimbledon tennis championships, reported revenues growth of five per cent in the six months to September.

The company, which serves four billion meals annually in 50 countries, said this compared with a 0.4 per cent rise in the first half, leading Compass to lift expectations for revenue growth in the year to September from 2.5 per cent to three per cent.

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Compass, the world’s largest food service company, said revenue growth in the UK was expected to decline,but there had been an improvement in the second half to minus 1.5 per cent from minus 5.7 per cent.

Compass said UK sales had improved in the face of “challenging economic conditions continuing to impact like for like revenues in the business and industry and sports and leisure sectors”.

Overall growth has been driven by new business in North America, such as contracts with Oracle and Amazon, and in Australia and Brazil.

Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers, said it was a “solid” update that showed a “progressive performance”.

But he added that management continued to highlight still challenging economic conditions, while rising food costs needed to be monitored for impact on profit margins.