Currency movements will add £120m to annual operating profit at Compass
Compass Group has benefited from cost cuts, new contract wins and the weak pound, the company said in a trading update today.
The world's largest caterer said that, despite the impact of the recession on its business and industry (B&I), and its sports and leisure divisions, it expects currency movements to add £120m to annual operating profit.
However, despite new business wins across all sectors, Compass's revenue for the 12 months to 30 September is expected to be down by around 5.5% in the UK and Ireland.
Like-for-like sales and volume growth in the B&I and sports and leisure units, continues to be hit by lower levels of employment and reduced discretionary spend by clients.
However, Compass's education, healthcare and defence, offshore and remote site sectors have remained solid throughout the year.
Compass said it expects underlying sales to grow by around one per cent and organic revenue growth to be "broadly flat". It also said its "cash-flow conversion remains strong."
"Encouragingly, throughout the year the level of new contract wins and underlying retention has remained strong," the group said in a statement.
"In the medium-term, a combination of the growth in outsourcing and global economies recovering should produce an upswing in demand."
Full results are expected to be announced on 25 November.
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By Janie Stamford
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