Compass boss in bid to set company back on course

07 December 2006
Compass boss in bid to set company back on course

Compass Group chief executive Richard Cousins has sought to draw a line under the caterer's troubled past in his first public outing.

Speaking to Caterer after the company's 2006 results presentation last week, Cousins outlined the need for a more coherent image, less focus on top-line growth and a review of its pricing framework, which he described as "not very good".

"It's not a very sexy message but it's an important one," he said.

Cousins, who took over from Mike Bailey in June, hopes his pragmatic approach will win over doubters after a string of profit warnings, a UN corruption investigation and question marks over pricing transparency. "Since joining I've travelled the globe and I feel that some credibility is coming back," he said. "Most people understand that it's fundamentally a good business and the signs are encouraging."

Compass reported 9.7% pre-tax profit growth to £374m in 2006, on the back of a 7.4% jump in turnover to £10.8b before exceptional items.

The City responded well to the change in tone and Compass shares closed up 7% at 290p on the day of the announcement.

Credit Suisse analyst Karl Green said: "The stock market cheered what he had to say and he'll get a decent grace period to see what he can do with the business."

Practical measures to help turn Compass into what Cousins called "a good, solid £10b company" include the sale of vending business Selecta and a pull-out from about 25 countries.

Consultant Jonathan Knight thought the move made sense. "They've moved away from the megalomania of the past when they went into any country that needed catering," he said. "The disposal of Selecta shows Cousins understands the difference between managing assets like vending machines and a service like catering."

By Tom Bill

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