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The Caterer

Sir Francis Mackay

12 May 2005
Sir Francis Mackay

Overall ranking: 2

Contract caterers ranking: 1

Snapshot

Sir Francis Mackay is the chairman of the Compass Group, the world's largest contract caterer. The group, which employs in excess of 400,000 staff in more than 90 countries, achieved annual sales of nearly £12b and pre-tax profits of £645m in 2004.

Career guide

Mackay, who was born in London in 1944, graduated as an accountant in 1967 and began his career in financial roles. He joined Compass Services in 1986 as finance director.

He led the acquisition of Compass from Grand Metropolitan in 1987 in the biggest UK management buy-out of the time. Mackay also led its flotation on the London Stock Market in 1988.

He became chief executive in 1991 and chairman in 1999.

When Compass merged with the Granada Group in 2000, Mackay acted as joint deputy chairman and executive director of Granada Compass. He returned to the role of chairman the following year when the companies demerged.

What we think

Mackay has steered Compass's growth from a £250m UK business in 1991 into the international giant it is today where it dominates a global market estimated to be worth £170b. In the peer-reviewed Britain's Most Admired Companies 2004 rankings, Compass was listed 20th in the pan-industry top 220 and was second only to Greene King among hospitality firms.

In doing so, he changed the face of contract catering and dragged it from the institutional canteen culture of yore into the 21st century. Mackay spearheaded the use of high-street (and company-created) brands in the workplace, adopted the marketing techniques of the commercial world, and was one of the first to spot the potential for expansion outside the workplace into new sites such as railways stations, football grounds, hospitals and airports. He also pioneered the use of sector-specific subsidies.

Mackay was responsible for Compass's international expansion through organic growth and a series of astute acquisitions. These included Letheby and Christopher and railway station operator Travellers Fayre in 1992, airport caterer Select Service Partners in 1993, Canteen Corporation of the USA in 1994, and Eurest in 1995.

Mackay received a Catey Special award for his achievements in 2001. In 2003 he was knighted for his services to the hospitality industry and to charity and in 2003 he was named the UK's seventh most powerful man in The Times Power 100 poll, based on combined directorships (Mackay is also non-executive chairman of B&Q owner Kingfisher).

As a strong and visible leader, Mackay was popular with the City and helped raise the status of the sector. However, his £18b merger with Granada threw the City into a temporary spin and Compass's share price dropped by 15%.

The merger made Compass the UK's biggest contract caterer and created a diversified group with annual turnover of £7.5b, pre-tax profits of £914m and new interests in hotels and roadside catering. But the City did not warm to this dilution of a pure food service company and Compass was forced to offload its new hotel and restaurant businesses (including Little Chef and the Travelodge, Le Meridien, Heritage, and Posthouse hotel brands).

Last year, the group's share price fell 35% to an all-time low of 213p on the back of a profits warning and a drop in operating profit. Observers believe a potential predator could pounce if the company does not return to form this year.

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