TIDMCPG
RNS Number : 1269C
Compass Group PLC
06 February 2020
Legal Entity Identifier (LEI): No. 2138008M6MH9OZ6U2T68
6 February 2020
AGM and Trading Update
Compass Group PLC today issues a trading update ahead of its
Annual General Meeting to be held at 10:30am 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 2019.
Group
Compass' organic revenue for the three months to 31 December
2019 grew by 5.3%, driven by strong levels of new business wins and
good retention rates, particularly in North America.
The cost action programme, which was announced in November, is
progressing as expected and the benefits are offsetting the
anticipated impact of lower Business & Industry volumes in
Europe.
Regional performance
Organic revenue in North America increased by 7.5%, with
particularly strong growth in Business & Industry, Healthcare
and Education.
In Europe, as anticipated, organic revenue was flat year on year
as it was impacted by the expected volume softness in Business
& Industry and a less favourable Sports & Leisure calendar.
These headwinds were offset by a good performance from Turkey and
our Central and Eastern European region.
Organic revenue in Rest of World increased by 4.7% supported by
good levels of growth in Australia and LATAM.
Currency
Currency movements, compared to the same quarter last year, had
a negative translation impact on revenues and profit in the quarter
of GBP71 million and GBP6 million respectively. If current spot
rates(1) were to continue for the remainder of the year, foreign
exchange translation would negatively impact 2019 revenue by GBP745
million and operating profit by GBP61 million.
Acquisitions and disposals
In the first quarter the Group spent GBP40 million on
acquisitions. Our strategy is to make targeted and disciplined
bolt-on acquisitions, focused on our core food offering, which
strengthen our capabilities. There continues to be a pipeline of
opportunities across the Group.
Following approval from the EU Competition Commission, we
completed the acquisition of Fazer Food Services on 31 January 2020
for an initial cash consideration of approximately EUR420
million.
We also continued to make progress with the disposal programme
and have recently sold 50% of our Japanese Highways business for a
consideration of GBP55 million, with agreement to sell the
remainder over the next three years. We expect to make further
progress with disposals throughout the year.
Outlook
We have had an encouraging start to the year and our outlook for
2020 remains unchanged with organic growth around the mid-point of
our 4-6% guidance range whilst maintaining our strong margin(2) .
In the longer-term, we remain excited about the significant
structural growth opportunities globally, and the potential for
further revenue and profit growth combined with further returns to
shareholders.
(1) As at 31 January 2020
(2) Pre IFRS16
****
Compass will hold a conference call for investors and analysts
today at 8:00 am (U.K. time).
Participant dial in number:
UK Toll Number: +44 (0) 330 336 9105
UK Toll-Free Number: 0800 358 6377
US Toll Number: +1 323 794 2093
US Toll-Free Number: +1 866 548 4713
Pin number: 1985178
Replay dial in number (available until 14 February 2020):
UK Toll Number: +44 (0) 207 660 0134
UK Toll-Free Number: 0808 101 1153
US Toll Number: +1 719 457 0820
US Toll-Free Number: +1 888 203 1112
Pin number: 1985178
Enquiries
Investors Kate Postans, Simon Bielecki & Agatha Donnelly +44 (0) 1932 573000
Press Tim Danaher & Fiona Micallef-Eynaud, Brunswick +44 (0) 207 404 5959
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 GBP25.2 billion in the
year to 30 September 2019. It operates in around 45 countries,
employs and engages over 600,000 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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