Granada Compass trading is on track

The integration of the hospitality businesses of Granada and Compass is progressing well, the newly combined company said today.

In a statement the firm said it was "well on schedule" to meet its target of £70m-worth of cost savings and claimed the merger of the management teams of Sutcliffe and Compass had been achieved "without any disruption to client relationships".

It forecast that trading results for the year to 30 September would be in line with expectations.

Like-for-like sales at Compass during the second half of the year have continued to grow in line with the 8% growth seen in the first half.

In the UK, new business included contract wins at the Excel exhibition centre in east London, mobile phone operator Orange, and Dell Computers.

In the US, Compass has just acquired a 49% stake in sports arena caterer Levy Restaurants for £53m. It has an option to buy a further 2% within two years.

Sales at Granada restaurants, which includes Sutcliffe and its roadside operations, are expected to increase "broadly in line with first half growth".

The company confirmed it was still in "exploratory discussions" with several parties about selling off its hotel division but reiterated: "These discussions are at an early stage and no announcement is expected in the short term."

During the first half of the financial year, revenue per available room (revpar) grew by 8% at Le Meridien, 3% at Posthouse and 4% at Heritage hotels.

Revpar for the five months from April to August had grown at an even faster rate, the company said.