Catering firm Compass Group says on track as revenues rise
LONDON, July 24 (Reuters) - Compass Group, the world's biggest caterer, said it was on track to meet full-year expectations as it posted a 4.0 percent rise in third quarter organic revenue.
The British firm, which operates in 50 countries and serves 4 billion meals a year, said its performance had been boosted by strong business in its core North American division and in emerging markets, helping offset a tougher time in Europe.
The group said organic revenue growth in the period since March 31 was 4.0 percent on a comparable working day basis and was up 4.5 percent for the nine months to June 30.
Operating profit margin increased by 20 basis points in the quarter, following a 15 basis point rise in the first half.
The group said it had won and retained high levels of business in North America and in its Fast Growing and Emerging division, with Brazil and Turkey performing strongly.
Organic revenue declined by 3.4 percent at its Europe and Japan arm, although the firm said its decision last year to start cutting loss-making contracts and selling businesses in southern Europe had offset the impact on profitability.
According to a Reuters poll of 23 analysts Compass is on average expected to post an annual pretax profit of around 1.14 billion pounds ($1.75 billion).
Earlier this month world number two catering firm Sodexo said it expected flat full-year operating profit in view of a difficult economic climate in Europe.
Compass said since the end of its third quarter it had signed an agreement to draw $500 million of new debt through a private placement with U.S. institutional investors, which would be used in part to repay some existing debt.
Shares in Compass closed at 876 pence on Tuesday, up 34 percent on a year ago and valuing the business at almost 16 billion pounds. ($1 = 0.6508 British pounds)
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