(Adds shares move)
Feb 6 (Reuters) - Britain’s Compass Group said on Thursday first-quarter revenue rose as new business in North America cushioned the blow of slower demand for its catering services in Europe.
Shares of the caterer were up about 3% in early trading, tracking its best day in over six months.
Compass, which provides 5.5 billion meals for office workers, armed forces and school children in more than 50 countries, said its first-quarter organic revenue grew 5.3% year-on-year.
The company, which counts Alphabet Inc’s Google, Coca-Cola, Shell and Nike Inc among its customers, maintained its 2020 forecast of organic growth in the range of 4%-6%.
“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 returns to shareholders,” the company added.
The FTSE 100 company said its cost-cutting plan, announced late last year, is progressing as expected and the benefits are offsetting slower demand in Europe.
The company had warned of hundreds of job cuts as a part of the programme in November to stem costs.
In the past, the British caterer had also cut food, labour and overhead expenses, and raised prices of their meals to boost profit, while operating margins took a hit from lower volumes and higher costs at its UK business.
In North America - the catering giant’s biggest market - revenue rose 7.5% in the quarter.
Compass said that it recently sold half of its Japanese Highways business for 55 million pounds ($71.45 million), as a part of its disposal programme.
$1 = 0.7698 pounds Reporting by Indranil Sarkar in Bengaluru, Editing by Sherry Jacob-Phillips, Bernard Orr