Compass sees upper range revenue growth as North America excels

Compass Group said on Thursday that it expects full-year organic revenue growth to come in at the top of its 4-6% range thanks to a strong performance in North America.

The catering services group said third-quarter organic revenue growth came in at 6.3%, with 8.5% growth in North America as the company continued to see good levels of new business wins across all sectors and significant benefits from a favourable sports & leisure calendar.

Organic revenue growth in the rest of the world was 3.2% in the third quarter and the same amount over the nine months to 30 June due to good margin progression.

However, European growth decelerated, coming in at 1.9% in the third quarter and 4.3% over the full nine month period. Compass said weakening volumes and margins in the UK, France and Germany reflected a more uncertain macro environment.

The FTSE 100 company said it has spent around £100m on bolt-on acquisitions in the third quarter, with the total invested in acquisitions in the nine months to 30 June 2019 standing at £470m.

Compass also agreed to acquire Nordic catering business Fazer Food Services for around €475m back in early June, though the proposed acquisition may be delayed by several months as it requires EU Commission competition approval.

At 0855 BST, the shares were up 2.8% at 2,019p.