Compass on track as first-quarter revenue rises
LONDON Feb 6 (Reuters) - Compass Group, the world's biggest catering firm, posted a 4 percent rise in first-quarter revenue and said it was upbeat on its prospects for the full year.
In its main North American market, where Compass makes almost 50 percent of its revenue, the firm said it had won good levels of new and retained business and, despite a slowdown in the Australian mining sector, revenue growth remained strong in its Fast Growing and Emerging markets arm.
Tough conditions in Europe, where Compass has cut costs and exited contracts to support profits, led to a continued revenue decline in its Europe and Japan division, although the group said it had begun to see signs of stabilisation.
The overall rise of 4 percent in organic revenue, which strips out the impact of acquisitions, was in line with analyst forecasts of 3 to 4 percent.
During its first quarter, the British pound continued to strengthen against many of Compass's key currencies, such as the U.S. dollar, euro, yen, Australian dollar and Brazilian real.
The firm said that, if current spot rates were to continue through 2014, it would expect a negative currency impact of 5.4 percent, or 942 million pounds, on 2013 reported revenue and 5.7 percent, or 72 million pounds, on 2013 underlying profit.
Compass, which employs more than 500,000 people to feed office workers, soldiers and schoolchildren in over 50 countries, said that notwithstanding the currency translation impact, its full-year expectations remained positive and unchanged.
"The pipeline of new contracts is encouraging and our focus on efficiencies gives us confidence in another year of delivery," Compass said in a statement.
Last month, catering rival Sodexo reaffirmed its full-year forecasts as new contracts offset the depressing effect of currencies in Latin America and weak demand in Europe.