Compass and Granada enjoy pre-merger gains
Both Compass and Granada saw an increase in profits during the first half of their current financial years. The companies released their interim results early following last week's confirmation that the companies are coming together in a £17.5b merger.
Granada's Hospitality division increased its operating profit by 8% to £246m in the 26 weeks to 25 March. Its contract catering wing's profits increased by 11%, its Le Méridien hotels' by 14% and Travelodge hotels' by 16%.
Profits in the company's roadside restaurants increased by 7% to £60m, helped by an 8% jump at Little Chef. Travelodge, the 195-strong budget hotel chain, saw sales increase by 17%, with both occupancy and room rates rising.
In contract catering, profits were up 11% to £59m. Schools catering subsidiary Fairfield won 92 new contracts and turnover grew by 16%. The defence catering division saw sales rise by 14% and the hospital division by 28%.
Granada's hotels increased operating profits by 7% to £127m in the six months.
Le Méridien's sales were up by 9%, largely due to a strong performance from hotels on the Continent.
At Posthouse, average room rates in the commercial and leisure sectors increased by 5% and 9%, respectively.
Compass reported turnover up by 12.1% to £2.6b for the six months to 31 March, and pre-tax profit up by 15% to £90.7m.
In the UK, the company turned over £419m during the six months, up by 8.5% compared with the same period last year. Its £27.6m operating profit was up by 12.2%, resulting in an increase in profit margin from 6.4% to 6.6%.
In North America, turnover increased by 12.6% to £904m with operating profit up 18.9% at £40.3m. Like-for-like profit margins improved from 4.2% to 4.5%.
In Continental Europe and the rest of the world, turnover of £1.3b was up by 13% and an operating profit of £65.1m had risen by 21.7%.
by David Shrimpton