Adoption of IFRS

Compass Group PLC
01 March 2006


                               COMPASS GROUP PLC

        ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS ('IFRS')

             PRELIMINARY RESTATEMENT OF 2005 FINANCIAL INFORMATION


Compass Group PLC ('Compass') has adopted International Financial Reporting
Standards ('IFRS') with effect from 1 October 2005. IFRS is the required
reporting basis for all EC listed companies for financial years commencing on or
after 1 January 2005. In line with best practice and to facilitate comparison of
future results with prior periods, Compass has today issued its results for the
year to 30 September 2005 and the six months to 31 March 2005 prepared under
IFRS. These results were announced previously under UK GAAP.

Under IFRS, the underlying operating profit for the year to 30 September 2005
(excluding goodwill amortisation, goodwill impairment and UK GAAP exceptional
items) is £654 million compared to £711 million under UK GAAP. The reduction is
primarily due to the share-based payments charge and proportionate consolidation
of certain joint ventures partly offset by the reduced pension service charge.

Under IFRS, net assets at 30 September 2005 are £2,278 million compared to
£2,284 million under UK GAAP. The inclusion of the full pension fund deficit and
the liability in respect of put options held by certain minority shareholders
are largely offset by the reversal of the goodwill amortisation charge for 2005
and reversal of the proposed dividend accrual.

The change to IFRS has a minimal impact on free cash flow generation.

Compass will report solely under IFRS for the six months to 31 March 2006 and
present its first Annual Report under IFRS for the year ending 30 September
2006.

FULL YEAR                                           Reported      Restated

Year ending 30 September 2005                        UK GAAP          IFRS
Revenue                                             £12,704m      £12,394m

Operating profit
- After goodwill amortisation and exceptional items    £302m         £501m
- Before goodwill amortisation and exceptional items   £711m         £654m

Profit attributable to equity holders of the Company
- After goodwill amortisation and exceptional items      £1m         £195m
- Before goodwill amortisation and exceptional items   £411m         £345m

Basic earnings per share
- After goodwill amortisation and exceptional items     0.0p          9.0p
- Before goodwill amortisation and exceptional items   19.1p         16.0p


SUMMARY OF CHANGES
Income Statement

Year ending 30 September 2005

                                             Operating profit   Attributable earnings
                                             (before goodwill        (before goodwill
                                             amortisation and        amortisation and
                                            exceptional items)      exceptional items)
                                                           £m                      £m
Under UK GAAP                                             711                     411
Share-based payments charge                               (46)                    (46)
Joint venture accounting                                  (27)                      -
Pension charge                                             15                       1
Financial instruments                                       -                     (10)
Income tax (other than tax on joint ventures)               -                     (11)
Other                                                       1                       -
Under IFRS                                                654                     345

IFRS requires the Group to record a charge for share-based payments equivalent
to the fair value of the award as at the date of grant. Under UK GAAP, no charge
arose on shares granted under the Group's share option plans or SAYE or
equivalent overseas schemes.

The Group has interests in a number of companies where it shares control with
partners. Under UK GAAP, the Group consolidated 100% of the turnover, results,
assets and liabilities where the Group actually exercised dominant influence,
with the partner's share being shown as minority interest. Under IFRS, the Group
is required to follow the legal form of the agreements and will in certain
instances consolidate only its share of turnover, results, assets and
liabilities. This has no impact on attributable earnings due to elimination of
the minority interest's share of profits.

The movement in the operating charge for pensions reflects the change in service
charge for defined benefit pension schemes of £15 million. This is mostly offset
by an increase in net finance costs in relation to pensions scheme assets and
liabilities of £14 million.

The effect of IAS 39 Financial Instruments is disclosed for the first time and
there is no material impact on either the Group's net assets or net debt at 30
September 2005. The IFRS income statement for the year to 30 September 2005
reflects an additional interest cost of £6 million relating to the unwinding of
the discount on put option liabilities and £4 million for exchange losses on
foreign currency borrowings that did not qualify as hedges under IAS 39 in the
period.

Under IAS 12 certain temporary timing differences that previously were not
recognised under UK GAAP will be recognised. In addition, IAS 12 does not allow
discounting of deferred tax balances, previously adopted by the Group under UK
GAAP.

Balance Sheet

As at 30 September 2005                                              Net assets
                                                                             £m
Net assets under UK GAAP                                                  2,284
Share-based payments                                                         16
Pension provision and related adjustments                                  (283)
Joint ventures                                                              (45)
Financial instruments                                                       (10)
Put options                                                                (163)
Income tax                                                                   11
Minority interest                                                            73
Goodwill amortisation and impairment                                        260
Proposed dividend                                                           140
Other                                                                        (5)
Net assets under IFRS                                                     2,278

The pension adjustments arise from the recognition of the full pension fund
deficit on the balance sheet at the end of the year. The underlying actuarial
assumptions remain unchanged.

The Group has entered into arrangements with minority shareholders giving them
the right to require the Group to potentially acquire their interests at some
point in the future. The present value of these 'put' options is recorded as a
financial liability, and is reflected as a deduction from equity. It is expected
that the majority of the remaining liability for put options will be eliminated
during the year to 30 September 2006 on completion of the acquisition of the
remaining interest in Levy Restaurants in the United States.

The movement on goodwill represents reversal of the UK GAAP amortisation charge,
together with an increase in the impairment charge made under UK GAAP. Under
IFRS, goodwill is subject to annual impairment reviews rather than amortised
over its estimated life.

Dividends declared after the balance sheet date are no longer recognised as a
liability in the financial statements, as there is no obligation at the balance
sheet date.

HALF YEAR                                          Reported      Restated
Six months ending 31 March 2005                     UK GAAP          IFRS
Revenue                                             £6,191m       £6,043m

Operating profit
- After goodwill amortisation and exceptional items   £192m         £300m
- Before goodwill amortisation and exceptional items  £328m         £300m

Profit before tax
- After goodwill amortisation and exceptional items    £41m         £155m
- Before goodwill amortisation and exceptional items  £177m         £155m

Basic earnings per share
- After goodwill amortisation and exceptional items    1.9p          7.2p
- Before goodwill amortisation and exceptional items   8.2p          7.2p



SUMMARY OF CHANGES
Income Statement

Six months ending 31 March 2005             Operating profit    Attributable earnings
                                            (before goodwill         (before goodwill
                                            amortisation and         amortisation and
                                           exceptional items)       exceptional items)
                                                          £m                       £m
Under UK GAAP                                            328                      177
Share-based payments                                     (23)                     (22)
Joint venture accounting                                 (12)                       -
Pension charge                                             6                       (3)
Financial instruments                                      -                        5
Income tax (other than tax on joint ventures)              -                       (3)
Other                                                      1                        1
Under IFRS                                               300                      155

The IFRS income statement for the six months to 31 March 2005 includes an
additional interest cost of £3 million relating to the unwinding of the discount
on put option liabilities and £7 million for exchange gains on foreign currency
borrowings that did not qualify as hedges under IAS 39 in the period.

Balance Sheet

As at 31 March 2005                                                  Net assets
                                                                             £m
Net assets under UK GAAP                                                  2,447
Share-based payments                                                         16
Pension provision and related adjustments                                  (160)
Joint ventures                                                              (44)
Financial instruments                                                       (12)
Put options                                                                (153)
Income tax                                                                   17
Minority interest                                                            69
Goodwill amortisation                                                       136
Proposed dividend                                                            71
Other                                                                        (4)
Net assets under IFRS                                                     2,383


SEGMENT REPORTING
PRIMARY SEGMENT ALLOCATION OF IFRS ADJUSTMENTS
Year ending 30 September 2005
                                                                      Unallocated
                          North    United   Continental     Rest of     corporate
                        America   Kingdom        Europe   the world     overheads     Total
                             £m        £m            £m          £m            £m        £m
REVENUE
External revenue
As reported UK GAAP       3,937     3,292         3,587       1,888                   12,704
Joint venture accounting      -       (38)          (59)       (213)                    (310)
IFRS basis                3,937     3,254         3,528       1,675                   12,394

Operating profit(before
goodwill amortisation and
exceptional items)
As reported UK GAAP         207       207           190         107             -       711
Central overheads            13         9            24           6           (52)        -
                            220       216           214         113           (52)      711
IFRS adjustments
Share-based payments        (11)      (14)           (9)         (6)           (6)      (46)
Joint venture accounting      -        (7)           (1)        (19)            -       (27)
Pension charge                8         4             3           -             -        15
Other adjustments            (1)        1             2          (1)            -         1
                             (4)      (16)           (5)        (26)           (6)      (57)
IFRS basis                  216       200           209          87           (58)      654


DETAILED IFRS RESTATEMENT AND PRESENTATION

A document setting out full details of the Group's income statement, statement
of recognised income and expense, balance sheet and cash flow statement for the
year ended 30 September 2005 and the six months ended 31 March 2005 on a
restated IFRS basis can be found in the Investor Relations section of our
corporate website www.compass-group.com. This document includes:

- Summary of significant differences between UK GAAP and IFRS
- Restated IFRS information
- Reconciliation of restated financial information from UK GAAP to IFRS
- Presentation of information prepared under UK GAAP in IFRS format.

The detailed document is accompanied by a short presentation explaining the main
changes arising from the move to UK GAAP from IFRS.

NOTES

(a) Forward looking statements

This Preliminary Statement Press Release contains forward looking statements
within the meaning of Section 27A of the Securities Act 1933, as amended, and
Section 21E of the Securities Exchange Act 1934, as amended. These statements
are subject to a number of risks and uncertainties and actual results and events
could differ materially from those currently being anticipated as reflected in
such forward looking statements. The terms 'expect', 'should be', 'will be', 'is
likely to' and similar expressions identify forward looking statements. Factors
which may cause future outcomes to differ from those foreseen in forward looking
statements include, but are not limited to: general economic conditions and
business conditions in Compass Group's markets; exchange rate fluctuations;
customers' and clients' acceptance of its products and services; the actions of
competitors; and legislative, fiscal and regulatory developments.

(b) A presentation for analysts and investors will take place at 11:30 am (GMT/
London) on Wednesday 1 March 2006 at the King Edward Hall, Merrill Lynch, 2 King
Edward Street, London, EC1A 1HQ.

The live presentation can also be accessed via a webcast starting at 11:30 am:

• To view the presentation slides and/or listen to a live audio webcast
  of the presentation, go to www.compass-group.com or www.cantos.com.

• Please note that remote listeners will not be able to ask questions
  during the Q&A session.

• A webcast replay of the presentation will be available for six months,
  at www.compass-group.com and www.cantos.com.

Enquiries:

Compass Group PLC     + 44 (0) 1932 573000
Investor/Analysts:    Andrew Martin
Media:                Paul Kelly

Website
www.compass-group.com.

Compass Group is the world's largest foodservice company with annual revenues of
over £12 billion. Compass Group has some 400,000 employees working in more than
90 countries around the world. For more information visit www.compass-group.com.




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