Compass Group sees full-year profits rise by nearly 30%

26 November 2008 by
Compass Group sees full-year profits rise by nearly 30%

Compass Group today revealed it has had "another excellent year" with full-year profit across the operation up by almost 30%.

The world's largest caterer saw reported turnover increase 11.4% to £11.4b (2007: £10.3b) in the year to 30 September 2008, after winning £28m of net new business in the year and delivering 94% contract retention.

Like-for-like growth, which strips out the effect of new contract wins, was £57m delivered through turnover growth and cost efficiency.

Operating margin improved from 5.1% in 2007 to 5.8% and pre-tax profit for the year was 29.8% higher at £566m (2007: £436m).

Richard Cousins, group chief executive, said he was "delighted" with the progress the group has made over the last 12 months.

"The new financial year has started well and the visibility we have on the sale pipeline is encouraging," he said. "Together with the scale of the market opportunity and ongoing demand for outsourced services, this gives us confidence that we can continue to deliver."

Cousins predicted that more companies would look to outsource their catering operations as the financial situation worsened

"There are already early signs that many organisations want to take costs out of their systems and are outsourcing more and more," he said, in a conference call. "Only 45% of catering is outsourced so there are lots of opportunities for us."

Although group turnover and profit was up with strong turnover growth in Continental Europe (18.3%) and the rest of the world (22.9%), the UK market, which contributes just over a quarter (16.8%) of group profit, remained stagnant.

UK turnover increased 0.3% year-on-year to £1.9b and operating profit was £108m (2007: £107m).

Couzins said the restructuring in recent years in the UK, cost reduction, exit from loss making contracts and re-organisation of the company's middle management and the recruitment of a new executive team headed by Ian El-Mokadem, was starting to show benefits.

UK wins included Abbey, Cornwall County Council,Royal Mail, Asda, Bank of England and Wellingborough Independent School.

Interview with Ian El-Mokadem of Compass UK >>

Compass creates one-stop shop in Eurest Services >>

Compass Group reports strong results >>

Compass Group retains contract with Leeds NHS trust >>

Compass Group lands £350m Army deal >>

Cousins delighted with Compass's progress >>

Compass wins £4.5m school dinner contract >>

By Chris Druce

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