Compass Q3 organic revenue up 3.9% on strong US performance

Global catering giant Compass said it continued to have a good year with a 3.9% rise in third quarter organic revenue, boosted by a strong performance in North America.

In a third quarter trading update, Compass said growth accelerated with strong net new business in North America, good progress in Europe, and a “challenging - but improving - environment in rest of world”. The rise was 5% excluding the timing of Easter, when many business shut down for a break.

For the nine months to 30 June 2017 organic revenue growth was 3.7%, it added.

Underlying numbers were given a massive boost by the weak pound, with Compass earning most of its money overseas. The company said at current exchange rates this would add £2.2bn to sales and £175m to profits.

Neil Wilson at ETX Capital said the currency impact was "not small beer by any means and this flattering of earnings will start to run off in the coming year as the pound stabilises against the dollar and euro. This poses the biggest risk to earnings next year".

"Compass is doing well as businesses are increasingly forced to meet higher expectations from workers, delivering better quality food in canteens and the like. Globally canteen outsourcing is a fairly immature market," he added.

“Compass had a good third quarter and our full year expectations remain positive and unchanged. North America is performing strongly and we anticipate further progress in Europe and Rest of World in the fourth quarter,” the company said.

“We remain focused on driving efficiencies throughout the business and our margin expectations for the full year are also unchanged.”