RNS Number : 5017E
Compass Group PLC
29 September 2008
Strictly Private & Confidential
29 September 2008
Compass Group PLC
"Compass" or "the Group"
Trading Update
This statement updates investors on the Group*s progress in the current year, ahead
of the announcement on 26 November 2008 of
its full year results to 30 September 2008.
The Group
The positive trading momentum of the first nine months has continued throughout the summer
period. For the full year, organic revenue
growth is anticipated to be comfortably over 5% and we expect to see around a 60 basis point
improvement in margins for the full year
compared with last year. Free cash flow generation continues to be well ahead of last year and
our financial position is strong.
The MAP programme continues to drive revenue growth in a more disciplined way and as a
result we are delivering a good balance between
net new contract wins and like for like growth. Gross margins are in line with the levels
achieved last year, reflecting the good work on
containing the impact of food cost inflation during the year. The improvement in operating
margins is primarily due to the delivery of
further efficiencies in unit costs combined with good leverage of existing above unit
overheads.
The strengthening against sterling of most of the currencies to which we are exposed has
continued, favourably impacting the translation
of our reported financials.
Around the World
Trading in North America overall has continued to be strong. Organic revenue growth for
the full year is expected to be around 7% and
margins are anticipated to improve by around 50 basis points.
In Continental Europe we are continuing to see a modest acceleration of organic revenue
growth and for the full year this is expected to
be around 5%. We anticipate margin growth of around 60 basis points, with most of the main
countries contributing strongly.
In the UK, we anticipate that revenues and operating profit will be broadly in line with
last year. The management team remain focused
on simplifying the business, generating and retaining high quality revenues as they continue
to re-position the business for future growth.
In the Rest of the World, we expect to see around 9% organic revenue growth for the full
year and another strong improvement in the
margin of over 120 basis points. We have seen continued good progress in improving the margins
in Japan and have benefited from strong new
business wins in the remote site businesses in Australia and Latin America.
Share Buy Back Programme
The Group commenced a further £400 million share buy-back programme on 1 July 2008, as
announced at the Interim Results. Between 1 July
2008 and 26 September 2008, the Group repurchased for cancellation 18 million ordinary shares
for a total consideration of £65 million,
excluding expenses. This brings the total number of shares repurchased since the share buy
back programme began in 2006 to 346 million for a
total consideration of £1,065 million.
ENDS
Notes to editors:
(a) Compass Group is the world's largest foodservice company with annual revenues of
over £10 billion operating in 60 countries. For
more information visit www.compass-group.com
(b) MAP (Management and Performance) is a simple, but clearly defined Group operating
framework. MAP focuses on five key value
drivers, enabling the businesses to deliver disciplined, profitable growth with the focus more
on organic growth and like for like growth.
The five key value drivers are:
MAP 1: Client sales and marketing
MAP 2: Consumer sales and marketing
MAP 3: Cost of food
MAP 4: Unit costs
MAP 5: Above unit overheads
(c) Operating profit, a term used throughout this announcement, includes share of
profit of associates and is wholly consistent with
the presentation in the Group's 2007 Annual Report and Accounts.
(d) This Press Release contains forward looking statements within the meaning of
Section 27A of the Securities Act 1933, as amended,
and Section 21E of the Securities Exchange Act 1934, as amended. These statements are subject
to a number of risks and uncertainties and
actual results and events could differ materially from those currently being anticipated as
reflected in such forward looking statements.The terms 'expect', 'should be', 'will be', 'is likely to' and similar expressions identify
forward looking statements. Factors which may
cause future outcomes to differ from those foreseen in forward looking statements include, but
are not limited to: general economic
conditions and business conditions in Compass Group's markets; exchange rate fluctuations;
customers' and clients' acceptance of its
products and services; the actions of competitors; and legislative, fiscal and regulatory
developments.
A copy of this release, together with all other recent announcements can be found on
Compass Group's website at www.compass-group.com.Copies of the presentation given to institutional investors and analysts are also available at
this site.
Enquiries:
Investors/Analysts AndrewMartin +44 (0) 1932 573000
Media Chris King +44 (0) 1932 573116
Website: www.compass-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
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