Compass ups expectations on back of American growth
Catering giant Compass Group has upped its growth expectations for the year again, following a strong performance in its American division.
The company said full-year organic revenue growth would now be at the top of its range – somewhere around 6%.
This follows a third quarter in which growth of 6.3% was driven by North America.
The region benefited from new business wins and a favourable calendar of sports and leisure events, reporting growth of 8.5% in the third quarter.
Meanwhile, European growth decelerated, climbing just 1.9% in the third quarter against a nine-month average of 4.3%.
The group said the slowdown was due to a tough comparable period in the UK last year, when the company secured major defence contracts.
However it admitted that the uncertain economic environment had also affected volumes in the UK, France and Germany.
The Rest of World division saw 3.2% growth in the period.
Compass said: “Compass continues to perform strongly. Revenue growth in North America is excellent and Rest of World is improving.
“Better-than-anticipated margin improvement in Rest of World and the mix effect of North American growth is offsetting the more difficult volume environment in Europe.”
The group is also on an acquisitions streak, having invested around £100 million in the third quarter to pick up bolt-on acquisitions, mainly in Europe.
In the nine months of the financial year so far, Compass has spent £470 million on takeovers, but this is likely to almost double once its proposed acquisition of Frazer Food Service for 475 million euros (£424 million) is cleared by competition authorities.