Interim Results

Compass Group PLC
22 May 2001



                                                             22 May 2001


                              COMPASS GROUP PLC

                          INTERIM UNAUDITED RESULTS

                    FOR THE SIX MONTHS ENDED 31 MARCH 2001

Compass Group announces strong first half results, its first results announced
since its demerger from Granada Compass in February 2001.

Highlights include:


*        Strong worldwide organic growth.  Like for like turnover up 8%.

*        Profit before interest goodwill amortisation and exceptional items up
108% to £268 million.

*        Hotels disposal process well progressed.

*        Re-launch of Motorway Service Stations which reported turnover up 6%.

*        Client retention rate above 95%.

*        Strong UK performance with like for like turnover growth up 6%



New contract gains announced this week include:

*        Eurest's largest-ever contract in the Czech Republic for OKD Group,
serving over 10,000 main meals per day.

*        The award of a contract to provide employee foodservice for The Royal
Bank of Scotland at 48 sites in the UK.



Francis Mackay, Chairman, said:

'The last 12 months has seen a number of significant developments for Compass
Group which have resulted in it becoming a larger and stronger foodservice
company worldwide. We have become the number one foodservice company in the UK
and acquired important UK brands and operations which will create a platform
for profitable growth in the UK and Continental Europe.'



Michael Bailey, Chief Executive, said:

'The Group has made an excellent start in the first half year and prospects
continue to be good.  The Board joins me in recognising the commitment of all
of its employees to its continued success, but would particularly highlight
the superb work of the employees and management teams within our UK business
in exceeding our expectations in terms of client and customer satisfaction,
business retention and new business growth during the last year.'


Chairman's Statement



Introduction

Compass Group is now the world's leading foodservice organisation with
business in over 90 countries world-wide, employing over 265,000 people and
with proforma annual revenues for 2000 in excess of £8billion.


The Group owns and operates major foodservice brands including Au Bon Pain,
Harry Ramsden's, Little Chef, Upper Crust and Ritazza which are available to
its clients and customers through its sector brands including Eurest,
Scolarest, Medirest, Select Service Partner and also its new brand, Moto,
which will be replacing Granada on the Motorway Service businesses of the
Group.


Since we regained our public company listing in February, we have been
disposing of the Forte hotel businesses, and the last piece of this, the
disposal of the Le Meridien hotel division is progressing well.  This will
leave us in a strong financial position with the resources to expand our
business.  The process has resulted in: -


-         Consolidation within the £200 billion global marketplace, to leave
Compass Group as the larger of the only two Global contract foodservice
companies.


-         The attainment of the clear number one position in the UK market by
bringing together two teams with established track records of organic growth
and margin improvement.


-         The strengthening of the Group's business in the concessions market,
through its UK Roadside and Motorway Services teams, creating a platform for
profitable growth in the UK and Continental Europe.


-         A reduced debt level and strong UK position leave us well placed for
future growth.



DIVIDEND

An interim dividend of 1.9p (net) per ordinary share of 10p each has been
declared on the existing share capital.  This is the first dividend payable by
Compass Group PLC.  As we have previously stated, our objective is that the
interim dividend should represent around one third of our total dividend for
this year to give a dividend cover of between 3 and 31/2 for the year based on
ongoing profit before goodwill amortisation and exceptional items.  Payment
will be made on 3 October 2001 to shareholders on the register at the close of
business on 17 August 2001.  The ex-dividend date will be 15 August 2001.



PROSPECTS

We are now a larger foodservice group, with a strategy for growth in a
marketplace with proven growth potential.  Since the demerger from Granada, we
have already made a number of strategic investments and again recorded strong
levels of like for like growth.  We continue to see a number of opportunities
to invest and to grow within the foodservice market, and we confidently look
forward to a future of continuing growth.



F H Mackay
Chairman



Compass Group PLC


Chief Executive's Report


I am pleased to report that we have achieved another first half year of record
operating profits and turnover and can report that our turnover growth has
exceeded the growth within our marketplace, maintaining the tradition
established by former Compass.  Reported turnover increased by 53% to £4,079
million, whilst like for like turnover growth (excluding the effect of
exchange rate movements and the impact of acquisitions) was 8%.


                                      2001       Reported  Like for Like Growth
                                                   Growth                     %
                                        £m
                                                        %
Turnover
UK
     Excluding fuel                  1,152            175                     5
     Fuel                              209              -                     6
                                     1,361            225                     6
Continental Europe & Rest of the     1,403              5                     9
World
North America                        1,315             45                     8
Total                                4,079             53                     8

Operating profit
UK                                     132            428                     9
Continental Europe & Rest of the        70             15                    17
World
North America                           61             56                    15
Total                                  263            110                    12


Like for like growth adjusts for acquisitions, disposals and exchange rate
movements and compares the results against the half year for 2000 which have
been prepared on a consistent basis.  Operating profit is before goodwill
amortisation and exceptional items and excludes associates.



Other key results were also positive during this period. Operating profit
before goodwill amortisation exceptional items and associates was up 110% at £
263 million (2000: £125 million) and profit before taxation, goodwill
amortisation and exceptional items was 157% up at £234 million (2000: £91
million) when compared to the first half of last year.  These increases
reflect a full six months contribution from Granada Restaurants in the 2001
half year.  The reported half year for 2000 comprised Compass Group only and
did not include any contribution from Granada Restaurants.  On a like for like
basis, total operating profit before exceptional items and goodwill
amortisation was 13% up, and adjusted basic earnings per share (before
exceptional items and goodwill amortisation) increased to 8.6p, an 83%
increase (2000: 4.7p).  Underlying margins in all operating divisions have
improved.




The Group continues to deliver strong rates of business retention,
demonstrating the benefits of focus on improving client and customer
satisfaction levels.  Business retention across the business continues to be
in excess of the 95% level achieved last year.  Strong new business growth
includes contracts announced this week with The Royal Bank of Scotland and OKD
Group, with no major contract losses during the period.



DIVISIONAL PERFORMANCE

United Kingdom

Turnover of our enlarged UK business of £1,361 million was 6% up on a like for
like basis (2000 proforma including Granada Restaurants: £1,290 million).
Adjusting for the impact of the disruption to rail services and by the current
foot and mouth outbreak, underlying turnover growth in the division was strong
at 7%. Operating profit of  £132 million was 9% up (2000 proforma including
Granada Restaurants: £121 million), with a margin up to 9.7% for 2001, despite
a first time pension charge of £5 million for the half year following the fair
value accounting of the Granada Restaurants UK pension scheme.  Adjusting for
this factor, operating profits advanced by £16 million (14%).



The integration of the business in the UK has been implemented successfully
with a focus on minimising client impact, resulting in retention rates in the
combined UK business at 95%.



As was outlined at the time of our trading update on 19 March, although not
material in the context of the Group, foot and mouth disease restrictions have
affected some leisure travel in the UK, and resulted in the cancellation of
some sporting events.  Supply has been maintained to customers throughout the
period of the restrictions although some price increases have had to be passed
on.



Roadside turnover excluding fuel was £267 million up by 10% (with the Motorway
Service areas and other roadside businesses up 7%).  Roadside operating profit
(excluding fuel) of £49 million was up by 11%.



Rebranding

The merger has delivered a strong new business base for the Group in Motorway
Services and Roadside in the UK, augmenting the Group's small European
presence in Motorway Services.  This marketplace is a market in which the
Group is now the market leader.  To demonstrate a commitment to the sector and
of our aim to deliver superior levels of customer service and satisfaction,
the Group intends to rebrand the Granada Motorway Service Areas.




The introduction of the Compass Group brands Upper Crust and Ritazza has been
well-received and the Group now has over 120 upper crust and 37 Caffe Ritazza
outlets  across the Motorway Service Areas and extending the use of these
brands in all of the roadside business is planned as part of the site
refurbishment and improvement programme.  Travelodge is substantially ahead
with strong growth of 23%in sales as a result of the combination of 325 new
rooms being opened in the first half and REVPAR increasing by 7%.



Compass Group today unveils the new name and identity for its Motorway Service
Area locations - Moto.  The new name and identity will gradually be introduced
to all of its Motorway Service Areas sites, completing the process for the UK
sites in Summer 2001 to present a new look and raise service levels in the
industry through the use of foodservice brands priced at high street levels.



Synergies

The Group continued on track to achieve planned synergies from the Granada
merger, which are anticipated to be £20 million this year.  These are being
achieved through purchasing initiatives and the consolidation of certain 'back
of house' support functions.  Purchasing synergies from the merger are being
achieved through price harmonisation, discounts for bulk purchasing and
reduction in distribution costs.



UK Major Contract Awards

Major contract awards during the half year include awards with The Thomson
Travel Group, The Royal Military in Cardiff and at Merrill Lynch's new
European Headquarters in London and a five year contract, worth £40 million
annual turnover, to provide catering services for 150,000 Sainsbury's staff at
427 stores in the UK.  Other significant contract wins include British
Airways, Bank of Scotland, BAFTA, Halifax Direct, Credit Suisse First Boston,
Powergen, RTE - Dublin, Scottish Widows, Glaxo SmithKline, Sun Microsystems,
Mori, OnDigital, Van den Burgh and Britvic.



Eurest Sutcliffe has been awarded a national contract for employee foodservice
for The Royal Bank of Scotland Group, one of Europe's leading financial
services groups and one of the largest banks in the UK.  Eurest Sutcliffe will
provide catering and selected support services to 37,600 staff at 48 offices
across the UK and Ireland under the terms of the contract worth £28 million in
turnover over two years.  This  includes 17 new sites where catering services
were previously provided by other suppliers.




Medirest new contract wins included Black Country Mental Health, Middle Essex
and Bedford and Luton NHS Trusts.  The company is also working with renowned
chef John Benson-Smith to introduce a restaurant experience to hospital
patients, as part of the Government's Better Food in Hospitals programme.



The Group also has secured the Rockingham Motorway Speedway Contract with
annual revenues of over £8 million.



North America

Turnover of £1,315 million was 45% up from £904 million and operating profit
(before goodwill amortisation) at £61 million was 56% up from £39 million.
These results include first time contributions from Levy, Au Bon Pain and
Beaver together with a currency translation benefit.  Like for like turnover
growth was a strong 8% and the margin on a like for like basis was up from
4.5% in 2000 to 4.8%.



This result has been achieved despite the signs of recession in the economy,
which are being mitigated by an increased interest in outsourcing activity.
The business has been successful in winning major national US contracts and
has been helped by providing the most comprehensive vending offer of any
foodservice business.



Notable events during the period included the following major contract gains:



-         Hollywood Bowl, California: Restaurant Associates have continued to
grow their business in North America with the gain of this prestigious
foodservice account serving over 15,000 customers a day;



-         Sprint - Canteen Vending were awarded an initial 5-year national
contract with Sprint with annual revenues of $5 million.



-         Datek Online - FLIK has been awarded an initial 5-year contract in
New Jersey with annual revenues of almost $4 million.



-         London Health Sciences Centre, Ontario: Compass Group has been
awarded a contract for foodservice at this major healthcare facility which
will have annual revenues of over Canadian $6 million for an initial 10 year
contract, serving in excess of 27,000 customers a day.




-         University of Missouri-Rolla: Chartwells has been awarded the
contract to provide foodservice for over 4,000 students a day at this
prestigious account with annual revenues in excess of £2 million per annum for
an initial 10 years.



Continental Europe and the Rest of the World

 Turnover of £1,403 million was 5% up from £1,334 million and operating profit
excluding associates (before goodwill amortisation) of £70 million was 15% up
from £61 million.  Like for like turnover was up 9% and the like for like
margin of 5.0% was also up from 4.7%.



Growth has been particularly strong in Brazil, where a 22% like for like sales
growth has been reported, Spain with 10% growth and Scandinavia 11% growth.



Notable events during the period included the following major contract gains:



Germany

Eurest has gained a number of major new contracts including employee
foodservice at Dresden airport (with annual revenues in excess of £1 million),
at IBM Deutschland (annual revenues in excess of £3 million), and at VFB
Stuttgart (annual revenues in excess of £2 million).



The Netherlands

Eurest has been appointed to provide employee foodservice at 5 sites for
Fortis in The Netherlands and at 3 sites for COA with total annual revenues
across the two contracts in excess of £3 million.



Scandinavia

Major new contract gains included the new restaurant at NCC Property's office
in Solna, Sweden serving over 650 customers a day through a restaurant with
vending and services to the nearby conference facility.  In Denmark, Eurest
has been awarded the foodservice and vending contract at Disa Industries (part
of the Maersk/A.P. Moller Group).  The Group is also now responsible for
customer foodservice in the world-famous Tivoli Gardens in Copenhagen running
14 outlets and giving an ideal opportunity to introduce a number of the
Group's brands in what is the third most visited amusement park in Europe.



China

Eurest has been awarded an initial two year contract to provide student and
staff foodservice for over 1,100 customers a day at the two campuses for the
Shanghai American School.  The contract includes the provision of Ritazza and
Upper Crust both to be seen for the first time in China.




Czech Republic

The award of our largest single contract to date in Czech Republic by OKD
Mines, providing foodservice to over 15,000 employees.  This contract has
initial annual revenues of £3 million.



Australia

New business awarded in the first half of this year included 3 sites for
Eurest to provide employee foodservice for BHP Iron Ore Mining - a contract
with a total initial value of Australian $8 million - as well as a ten year
contract for foodservice at Adelaide Zoo and an 8 year contract for Qantas
Jetbase.



Portugal

Two contacts representing a total of 98 sites and over £4 million per annum
have been awarded to the Group for the provision of over 26,000 meals per day
to students at Portuguese schools.



Brazil

New contracts awarded included General Motors and CSN with annual revenues
across the contracts in excess of £5 million to feed over 16,000 customers a
day.



DISPOSALS

The disposal of the Group's hotel business is well progressed.  The Heritage,
Posthouse and Signature Hotels have been sold for £1.36 billion, and a further
announcement with regard to the disposal of the Le Meridien brand is expected
to be made shortly.



As a result of this the Group has reviewed the provision of shareholder
discounts, previously available at public-access locations including the
hotels and Little Chef.  The new owners of the hotel groups sold to date have
agreed that a 12.5% shareholder discount can continue to apply until 30 June
2001 at Posthouse and until 30 September 2001 at Heritage Hotels on the
production of a Moments Shareholder card or of other proof of share ownership
in the Group (subject to the discretion of the hotel General Management).  The
Group confirms that after these dates discount will no longer be available to
shareholders at all remaining sites where discount previously applied (Harry
Ramsden's, Little Chef, Travelodge and Le Meridien) as it recognises that the
cost of providing this benefit is not effective in delivering a benefit to all
shareholders.  The Group will continue to look at alternative routes to
recognise shareholders when using its public-access contracts across the World
and will update shareholders further in its Annual Report.




INVESTMENTS

In the six months to 31 March 2001 a total of £302 million has been invested
back into the business by way of expenditure on acquisitions.  Since 31 March
2001, the group has expended a further £710 million completing the
acquisitions of Morrison Management Specialists and Selecta.



North America

Morrison Management Specialists

Morrison Management Specialists Inc., the second-largest US healthcare and
senior living/retirement foodservice company was acquired on 3 April 2001,
just after the period end via an agreed tender offer.  The consideration paid
by Compass Group for the Morrison share capital was $563 million in addition,
debt of $63 million was assumed by the company.



In the US, the healthcare foodservice market is estimated to have annual
revenues in excess of $16 billion, of which only some 30% is outsourced to
specialist foodservice organisations.



Morrison serves over 475 clients in the healthcare and senior living markets
through Morrison Healthcare Services and Morrison Senior Dining.  In the
financial year ended 31 May 2000, Morrison experienced a 20% increase in
managed volume (total operating costs managed) to $778.6 million and a 36%
increase in revenues and the growth prospects in this market place remain
good.



Beaver Foods

Beaver Foods, a wholly owned Canadian subsidiary of Cara Operations Limited
was acquired on 2 November 2000 for £71 million.  Beaver Foods has annual
revenues of approximately US$200 million and has tripled the volume of
business for Compass Group in Canada, positioning the company as the leader in
education and remote site foodservice within the Canadian marketplace.



It has more than 1,000 accounts in high schools, colleges and universities,
remote camps and business and industry.



As a result of this agreement Cara has also entered into strategic alliances
with the Group in Canada including a five-year service distribution agreement
with Cara's wholly owned subsidiary, Summit Food Service Distributors Inc, to
supply Beaver's current and future operations in Canada, and a 10-year
agreement for the use of Cara's brands, including Harvey's and Swiss Chalet,
in contract foodservice locations.




Europe

Selecta

On 12 February 2001 we announced the terms of a recommended cash offer to
acquire the 66.7% of Selecta not already owned by Compass Group.



This was a strategically important move for the Group.  Clients are
increasingly seeking the choice of a combined foodservice and vending offer.
This move brings the number one vending company in North America together with
the number one vending company in Europe - combining the expertise of Canteen
Vending (Compass Group's vending subsidiary in North America) together with
Selecta and further strengthens Compass Group's presence in the sector.



The total consideration for the 66.7% of Selecta is CHF 901 million (£374
million).  To date 96.5% acceptances have been received and a payment of
CHF853 million (£344 million) was made in May 2001.



Middle East

Compass Group also announced in February 2001 the formation of a joint venture
in the Middle East with ADNH, creating a market leadership position in this
$1.3 billion (£911 million) market.



Others

Other investments in the year include a strategically important investment in
Japan, and the acquisition of Au Bon Pain in the USA, which was announced with
our preliminary results last year.  Also included in the group total is a
payment of £63 million to Granada Group in respect of that company's 2000
interim dividend which was agreed at the time of the merger.



FINANCING

Cash flow generation from operations continues to be strong, with an inflow in
the period of £239 million (2000: £123 million).  Free cashflow for the half
year of £31 million is unusually low since cash generated from operations
excludes any contribution from Forte Hotels whereas free cashflow is after
paying interest of £152 million on all debt before recognition of interest
that will be reduced once the hotel proceeds have been received.  Net debt at
31 March 2001 of £4,049 million compares to £3,696 million at 30 September
2000 both having been restated to reflect the fair value adjustment to the
debt assumed on the acquisition of Granada Restaurants (which on 30 September
2000 was £328 million).   The cash cost of redeeming these loans at redemption
will be unaffected by this adjustment.  The net debt will reduce once the
hotel disposal proceeds are received.  The Directors believe that the average
taxation rate of 26.7% of the profit on ordinary activities before taxation,
goodwill amortisation and exceptional items having excluded imputed interest
income which, does not attract tax, is a prudent estimate of the full year
rate.



Exceptional items of £69 million relate to the UK integration of Granada
Restaurants and represent cash integration costs of £19 million and the
non-cash write off of duplicate assets of £37 million.  In addition,
exceptional items include the cost of a commitment plan of £13 million entered
into to retain senior employees.  This plan is payable in Compass Group
shares.  The goodwill amortisation in the period was £86 million.



OUTLOOK

The Group has made an excellent start to the New Year and prospects continue
to be good. The effect of the foot and mouth outbreak on UK turnover is now
reduced and the growth in turnover in the UK has reverted to previous expected
levels.  The Board joins me in recognising the commitment of all of its
employees to its continued success but would particularly highlight the superb
work of the employees and management teams within our UK business in
delivering our expectations in terms of client and customer satisfaction,
business retention and new business growth during the last year.





M J Bailey

Chief Executive





Enquiries:

22 May 2001

Francis Mackay        Chairman               Compass Group PLC     020 7796 4133
Michael Bailey        Group Chief Executive  Compass Group PLC     020 7796 4133
Andrew Lynch          Group Finance Director Compass Group PLC     020 7796 4133
Nick Lyon             Hudson Sandler         020 7796 4133



Thereafter

Francis Mackay       Compass Group PLC        01932 573 000
Michael Bailey       Compass Group PLC        01932 573 000
Andrew Lynch         Compass Group PLC         01932 573 000