New business makes for tasty quarter at Compass

Catering company Compass said organic revenue for the three months to December 31 grew by 6.9%, driven by new business wins, good retention rates, new UK Defence contracts and a positive sporting events calendar.

The company added that it had made “an excellent start to the year” and now expected to be slightly above the middle of its target 4-6% organic growth range for the full year, with “modest margin progression”.

Compass said year on year currency movements had a positive translation impact on revenues and profit in the quarter of £107m and £10m respectively.

Organic revenue in North America increased by 8.0% with good growth across all sectors, particularly in business & industry and sports & leisure, Compass said.

In Europe, organic revenue grew by 6.4% reflecting continued momentum from new business wins, notably the significant impact of defence contracts in the UK mobilised in the second half of 2018, a beneficial sports & leisure calendar and continuing good growth in Continental Europe.

Organic revenue in Rest of the World increased by 2.8%, with ongoing good performance in developing markets partially offset by the run-off of the last offshore construction project in Australia.

If current spot rates were to continue for the remainder of the year, foreign exchange translation would positively impact 2018 revenue by £508m and operating profit by £43m.