Strong trading statement sends Compass shares higher
Thursday 27th March 2008, 10:44AM GMT.
A strong interim trading statement from Compass sent the food service group’s share value up 4.1 per cent in morning trading on the FTSE 100.
Trading in the first five months of the current financial year has been ahead of the company’s expectations and Compass expects organic revenue growth to be just over five per cent for the half year.
Compass also said it expects to deliver 50 basis points of margin improvement compared with the same period last year.
Overall, the UK-based company is expecting a favourable impact of around £6 million on operating profit from the movement of key currencies for the six months to March 31st 2008 compared with the same period last year.
Organic revenue is forecast to rise by around seven per cent for the first half in North America and by five per cent in continental Europe.
In the UK, where Compass has struggled to maintain growth in its education sector – blamed on the ‘Jamie Oliver effect’ as schoolchildren refused healthy school lunches – revenues will be broadly in line with last year.
Compass said a combination of good market growth from a diversified geographical and sector base, improving working capital management, capital expenditure control and clearly identified cost efficiencies, “leaves us confident that this trend will continue through the second half of the year”.
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