Compass to see decline in growth in UK and Ireland
Compass is expected to see a decline of around 1% in its organic revenue in the UK and Ireland for its full financial year, which ends at the end of September.
The company said in a trading update this morning that while new business remained solid and retention rates were improving, difficult economic conditions were resulting in a "modest contraction" in like-for-like volumes.
As a whole, the group said it expected to see organic revenue growth of over 4% for the final quarter of its financial year, while full-year constant currency revenue growth, including the contribution from acquisitions, would be around 9%. Organic growth is expected to be around 5%.
However overall operating profit margin is expected to remain broadly flat, as a result of the effects of the earthquake in Japan earlier this year, and the impact of acquisitions.
Compass said organic revenue growth in the year had been driven by "strong levels" of new business wins, an improvement in the underlying rate of retention to around 94% and modest inflationary price increases. Overall for the year, like-for-like volumes are expected to remain flat, reflecting marginally positive growth in the first half and marginally negative like-for-like volumes in the second half of the year.
The company said it was positive about the future, although it expected economic uncertainty to put pressure on like-for-like volume in some parts of the business.
Compass's full-year results will be published on 23 November 2011.
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By Neil Gerrard
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