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Compass revenues dragged down by ‘challenging cost environment’ in UK

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Compass revenues dragged down by ‘challenging cost environment’ in UK
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Compass Group has reported a 5.5% rise in global revenue to £23.2b with profit up 7.1% to £1.74b.

In Europe revenue was up 2.7% at £5.8b for the year to 30 September, though profit fell 4.4% to £395m.

The group said that despite securing significant contract extensions, such as Virgin Trains, it was not enough to offset “the challenging volume and cost environment in the UK”.

Global revenue was driven by North America, which reported organic growth of 7.8% to £13.8b, delivering £1.1b profit.

Chief executive Dominic Blakemore said: “Compass had another very strong year. Revenue growth was healthy, driven by excellent growth in North America, an acceleration in Europe and good progress in rest of world.

“We continue to drive operating efficiencies around the business and were able to move the margin slightly forward, with improvements in rest of world offsetting a more difficult volume and cost environment in Europe, especially the UK.”

He added: “We are actively managing the portfolio to increase our focus on food and are in the process of disposing of up to 5% of revenues in non-core businesses. We continually look at bolt-on acquisition opportunities that strengthen our offer and meet our strict returns criteria.

“Our expectations for FY2019 are positive. The pipeline of new contracts is strong and our focus on organic growth, efficiencies and cash gives us confidence in achieving another year of progress. We expect organic growth to be in the middle of our 4%-6% range with modest margin progression.”

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