March 26, 2013 / 7:50 AM / 5 years ago

UPDATE 1-Compass on track as North America drives growth

* Sees H1 organic revenue growth towards 5 pct, in line with forecasts

* Expects operating profit margin increase of 15 basis points

* FY expectations remain positive and unchanged

LONDON, March 26 (Reuters) - Compass Group, the world’s biggest catering firm, said it expected revenue growth of around 5 percent in the first half, buoyed by contract wins in North America and Australia.

The firm, which serves 4 billion meals a year and operates in some 50 countries, said trading had been strong in its core North American market, helped by large university and healthcare deals.

It said it had also seen good growth in Australia, thanks to its oil and gas industry, and Brazil and Turkey.

Its 5 percent organic growth forecast for the six months to end-March is the same as a year ago and in line with analysts’ forecasts. Compass added on Tuesday that it expected its operating profit margin to increase by around 15 basis points in the period.

At its North American business organic revenue growth, which strips out contributions from acquisitions, is expected to be around 8.5 percent, the firm said, with organic growth of over 10 percent expected in its ‘fast growing and emerging markets’ unit.

As expected, revenue continued to decline in Europe, where the firm has cut operations in the south. Organic revenue in the region is expected to fall 2.5 percent in the first half.

The group, which provides catering to everyone from schools and hospitals to offshore rigs and the tennis at Wimbledon, said it remained on course to meet full-year expectations.

Shares in the firm, which have risen 15 percent in three months, closed at 835 pence on Monday, valuing the business at around 15 billion pounds ($23 billion).

Sodexo, the world’s No.2 catering firm, has forecast modest revenue and profit growth this year due to a slowdown in Europe, and is targeting work in emerging markets and outside of catering to grow its business.

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