Compass hits growth target and lifts profit

Compass has reported rises in profit and turnover despite difficult economic conditions. The largest food service company in the world met a target of a 6% rise in like-for-like turnover and said it was well on the way to deliver the same growth in 2004.

In the year ended 30 September, pre-tax profit was up 12% to £654m on turnover of £11.21b.

In the UK, where turnover grew by 5% to £2.51b, Compass singled out contract catering and vending in the defence, offshore and education sectors as strong performers.

In Continental Europe, the company's biggest market, turnover rose by 6% to £4.63b. Tough trading conditions in Germany and industrial action in France were offset by growth in Spain and Portugal.

In North America, healthcare and education turnover grew by 10% and 12% respectively, and business and industry (B&I) was up 8%. Compass said job losses had had less effect on the healthcare and education sectors, and B&I growth had been maintained by focusing on client retention, which stood at 95% across all sectors of the group. Overall, North American turnover rose by 7% to £3.56b.

Chief executive Michael Bailey said the company had no acquisition targets now that most major territories were covered. With food service companies still managing less than 15% of the potential global catering market, he said: "I look forward with confidence to 2004 as the group continues to focus on organic growth and delivering at least 6% like-for-like turnover growth."

Sir Francis Mackay, chairman, said: "It has been a most challenging year, with geopolitical difficulties and the Sars outbreak, so we are more than delighted that the management team has achieved all of its objectives."