Rebranding lifts compass profits
Compass Group last week claimed rebranding its worldwide business and industry operations under the Eurest banner has proved a great success, as it reported pre-tax profits up 118% to £67.8m on sales of £1.24b in the half year to 31 March.
Compass chief executive Francis Mackay said the name change, which saw the end of Compass Services in the UK, had been welcomed enthusiastically by staff, clients and customers alike. "The change leaves the group well placed to take advantage of client networking opportunities to grow organically," he said.
The UK displayed strong organic growth with turnover up 12% to £267.8m and operating profit up 12% to £17.3m. This illustrated the success of the company's strategies of market sectorisation and branding, said Mr Mackay.
The number of branded outlets in the New Famous Foods division grew by 200% over the year. Improvements to Compass's Upper Crust own brand at selected outlets resulted in a 20% increase in sales, said Mr Mackay.
However, profit margins in the UK were flat at 6.5%, with a margin of 7.1% predicted for the full year. "We have invested a lot in terms of growing the healthcare and education sectors and pushing our brands forward," said finance director Roger Matthews.
Turnover for the group was boosted by the first full half-year contribution from Eurest International, which was acquired last summer, and the exceptional profit of £20m from the sale of the hospitals and nursing homes division.
