Compass Group has announced that it has achieved its target of cutting costs by £50m in the financial year which ends on 30 September.
In a trading update, the catering giant also said its UK business was now showing positive signs of stabilising and it was confident it would deliver a similar level of turnover and profitability as the year before.
However, the group said its efforts to strengthen its financial and operational disciplines, while addressing lower margin contracts, would result in a reduced level of overall revenue growth in the near term.
Compass said progress has been made in the education sector, after the Government’s introduction of new nutritional standards at the start of the current school term.
Following the completion of the sale of its travel concessions business, Select Service Partners, in June, the company has now commenced a £500m share buyback programme.
As of 26 September, 54.4 million shares had been bought back at a cost of £139.6m.
The company is poised to embark on a massive restructuring programme, which will see a review of its brand estate, 200 management job cuts and a number of senior executives leaving.
By Chris Druce
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Published by: The Caterer