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Time for Compass to confront its demons

24 November 2005
Time for Compass to confront its demons

It's been tough at the top for Compass this year. As we await the company's final results, we look back on 12 months comprising a UN investigation, mudslinging from our Jamie and a few sessions of musical chairs in the boardroom. And, despite predictions of £580m pre-tax profits, which might seem phenomenal to you and me, it's just not been good enough for the shareholders, who have seen the value of their shares sink to a 10-year low.

The trouble with being large (Compass has 400,000 employees worldwide) and successful (Francis Mackay steered Compass from a £250m UK business in 1991 via organic growth and astute acquisitions into the international giant it is today) is that people around you get a touch of the green-eyed monster. You're going to be scrutinised, and people wait in anticipation for your downfall. It seems Compass's extraordinarily fast growth has come at a price.

But in spite of a consistent battering from the press, Compass isn't about to fall apart. As City analyst Karl Green, of Dresdner Kleinwort Wasserstein, comments in this issue, the UN scandal couldn't have come at a worse time, but the direct financial consequences won't be massive.

With a new year approaching and a clean slate on the horizon, the company's new management team will, no doubt, take it in a fresh direction. If it chooses to enter a period of consolidation - as the decision to sell its travel concession Select Service Partners might suggest - it does so without the fear of losing its spot as the largest global caterer. Compass will remain a significant player.

What it must also look at, though, is its response to criticism. If it is to re-establish its reputation for quality and quantity, it needs to publicly confront its demons. Doing this won't only silence its critics (eventually), it will benefit its employees, the backbone of its business.

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