Compass Group profits hit £1.1b on the back of efficiency drive
Catering giant Compass Group has reported revenue of £17.1b, up 4.1% on 2013, and profit before tax up 5.4% to £1.15b for the year to 30 December 2014.
It said that strong organic growth in North America, accelerated growth in emerging markets, and high retention rates had driven its progress. Its sports and leisure business in North America was particularly strong, reporting double digit growth through new business and high attendance at sporting events.
Businesses in Europe didn't fare quite so well, with revenue down 5.3% at £5.7b, and operating profit falling 2.6% to £409m.
Chief executive Richard Cousins said that trading remained difficult in some European markets, though the firm had seen good levels of business in the UK, Spain and the Nordics.
He added: "The exit of certain uneconomic contracts is now complete, and has, as expected, impacted our retention rate during the year. We have won contracts with the Ville de Cannes and the Philharmonie de Paris and retained contracts with Chelsea Football Club and Somerset House in the UK, ENI Group in Italy, Lundbeck in Denmark and The International School of Luxembourg."
Cousins said that although volumes remained negative in the UK, the trends were improving.
He said: "Our strategy is clear. Food is and will remain our core competence and is backed with some strong support service businesses. All our markets have exciting opportunities and as a result we are investing more resources around the world to deliver strong growth. At the same time we remain disciplined with regards to margins."
Progress on operational efficiencies and cost reduction increased constant currency operating profit by £5m, or 1.2%, to £409m (2013: £404m). This equates to 20 basis points of operating margin progression to 7.2%.
