Compass sitting pretty on £600m as Elmo departs

31 March 2010
Compass sitting pretty on £600m as Elmo departs

Compass boss Ian El-Mokadem is to leave the business, with Ian Sarson stepping up to become group managing director for the UK and Ireland.

El-Mokadem, known universally as "Elmo", relinquished his role to Sarson earlier this week. However, he will remain with the business until September to facilitate a smooth changeover and conclude his involvement in a number of group-level projects.

Unlike Elmo, who previously held senior positions with British Gas operator Centrica, Sarson has worked exclusively within the food, support services and hospitality sectors.

His appointment has prompted speculation that the UK's largest contract caterer, ahead of rivals including Aramark, Elior and BaxterStorey, may be gearing up to hop back on to the acquisition trail after Compass's annual results last September revealed the company is sitting on a cash pot of almost £600m.

However Peter Smale, managing director of food service consultancy Turpin Smale, said the cash is more likely to be invested in joint ventures with clients to foster organic growth.

"Acquisition is always a possibility, but it's not necessarily a good long-term solution," he explained. "Without being unkind, why would Compass want to buy a struggling rival? It would be far better to target its rivals' contracts."

Despite facing criticism for being a food service novice when he started at Compass in 2005, Elmo's forthcoming departure has been met with surprise by some industry professionals.

Chris Stern, director of Stern Consultancy, applauded Elmo for the way in which he reversed the fortunes of what was, on his arrival, an ailing business and described him as "a breath of fresh air".

However, Stern added there would be those who will welcome a change at the top.

"Some might say he focused purely on turning Compass into a money-making business and forgot about the catering," he said.

Sarson, who steps up from his current position as managing director for specialist markets including healthcare and education, will report directly to group chief executive Richard Cousins and will also join the group executive committee.

Cousins said: "We would like to thank Ian El-Mokadem for his hard work, passion and energy over the past four years and wish both Ians every success in their careers going forward".

Ian Sarson to replace Compass boss Ian El-Mokadem>>

Ian El-Mokadem>>

By Janie Stamford

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