TIDMCPG
RNS Number : 2473E
Compass Group PLC
08 February 2018
Legal Entity Identifier (LEI) No. 2138008M6MH9OZ6U2T68
8 February 2018
AGM and Trading Update
Compass Group PLC is issuing a trading update ahead of its
Annual General Meeting to be held at 12:00 noon today in the Live
Room, Rugby Football Union, Rugby House, Twickenham, Middlesex TW2
7BA. At this meeting, shareholders will be provided with the
following update on the Group's performance since 30 September
2017.
Group
Compass' organic revenue for the first three months to 31
December 2017 grew by 5.9% driven by strong levels of new business
wins, excellent retention and good like for like revenues.
We continue to generate efficiencies through our management and
performance (MAP) programme. We are also taking actions to offset
above average cost pressures in the UK, the benefits of which will
come through in our operating margin in the second half of the
year.
Regional performance
Organic revenue in North America increased by 8.2%. Growth was
very good across all sectors, with particularly strong growth in
Healthcare & Seniors, Vending and Sports & Leisure. In
Europe, organic revenue grew by 2.1%, due to good growth in UK
Business & Industry and a favourable calendar in Sports &
Leisure. Organic revenue in Rest of the World increased by 4.0%,
driven by strong performances in Turkey and some of our Spanish
speaking Latin American businesses. Our Offshore & Remote
business declined by 1.6%, which was better than expected due to
delays in the transition from construction to production at certain
sites. Growth in Rest of World excluding Offshore & Remote was
6.1%.
Currency
Currency movements, compared to the same quarter last year, had
a negative translation impact on revenues and profit in the quarter
of GBP288 million and GBP24 million respectively. If current spot
rates were to continue for the remainder of the year, foreign
exchange translation would negatively impact 2017 revenue by GBP1.2
billion and operating profit by GBP97 million.
Acquisitions
The Group spent GBP265m on acquisitions during the quarter, the
largest of which was Unidine, a pure-play food service provider in
the rapidly growing Healthcare & Seniors market in the United
States. The acquisition of Unidine, which has annual revenues of
around $220m and margins broadly in line with Compass North
America, completed on 31 December 2017.
Tax
As announced on 22 January 2018, as a result of the passage into
law of the Tax Cuts and Jobs Act in the United States, we expect
the Group's effective tax rate to be reduced from 26.5% to around
24%, and the Group's cash tax rate to between 19% - 22% in the year
ending 30 September 2018.
Outlook
We had a strong quarter and our outlook for 2018 is positive.
Growth in North America is excellent, and both Europe and Rest of
World are performing better than planned. Therefore, we now expect
to be above the middle of our target 4-6% organic growth range for
the full year. We continue to focus on driving efficiencies
throughout the business and expect modest margin progression on a
full year basis, albeit second half weighted. In the longer term,
we remain excited about the significant structural growth
opportunities globally and the potential for further revenue and
margin growth.
Compass will hold a conference call for investors and analysts
today 8:00a.m. (UK time).
Participants dial-in numbers:
UK Toll Number: +44 333 300 0804
UK Toll-Free Number: 0800 358 9473
US Toll Number: +1 631 913 1422
US Toll-Free Number: +1 855 857 0686
Pin number: 04890453#
Replay facility:
UK Toll Number: +44 333 300 0819
UK Toll-Free Number: 0800 358 2049
US Toll Number: +1 866 931 1566
US Toll-Free Number: +1 844 307 9361
Conference Number: 301215388#
Enquiries
Sandra Moura, Head of Investor Relations & Corporate Affairs +44 (0) 1932 573000
Website: www.compass-group.com
Note to Editors
a) Compass Group PLC is the world's leading food service
company, which generated annual revenues of GBP22.6 billion in the
year to 30 September 2017. It operates in around 50 countries,
employs over 550,000 people and serves over 5.5 billion meals a
year. The Company specialises in providing food and a range of
support services across the core sectors of Business &
Industry, Healthcare & Seniors, Education, Sports & Leisure
and Defence, Offshore & Remote, with an established brand
portfolio.
b) Organic revenue growth, a term used throughout the
announcement, is calculated by adjusting for acquisitions
(excluding current period acquisitions and including a full period
in respect of prior period acquisitions), disposals (excluded from
both periods) and exchange rate movements (translating the prior
period at current period exchange rates).
c) Forward looking statements
Certain information included in this announcement is
forward-looking and involves risks, assumptions and uncertainties
that could cause actual results to differ materially from those
expressed or implied by forward-looking statements. Forward-looking
statements cover all matters which are not historical facts and
include, without limitation, projections relating to results of
operations and financial conditions and the Company's plans and
objectives for future operations, including, without limitation,
discussions of expected future revenues, financing plans, expected
expenditures and divestments, risks associated with changes in
economic conditions, the strength of the foodservice and support
services markets in the jurisdictions in which the Group operates,
fluctuations in food and other product costs and prices and changes
in exchange and interest rates. Forward-looking statements can be
identified by the use of forward-looking terminology, including
terms such as "believes", "estimates", "anticipates", "expects",
"forecasts", "intends", "plans", "projects", "goal", "target",
"aim", "may", "will", "would", "could" or "should" or, in each
case, their negative or other variations or comparable terminology.
Forward-looking statements are not guarantees of future
performance. All forward-looking statements in this announcement
are based upon information known to the Company on the date of this
announcement. Accordingly, no assurance can be given that any
particular expectation will be met and readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only at their respective dates. Additionally, forward-looking
statements regarding past trends or activities should not be taken
as a representation that such trends or activities will continue in
the future. Other than in accordance with its legal or regulatory
obligations (including under the UK Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), the Company undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Nothing in this
announcement shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
d) A copy of this release, together with all other recent
announcements and presentations can be found on Compass Group's
website at www.compass-group.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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February 08, 2018 02:00 ET (07:00 GMT)
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