Compass Group PLC
29 March 2007
29 March 2007
Compass Group PLC: Trading Update
This statement updates investors on the Group's performance based on the results
for the first five months of the current year, ahead of the announcement on 16
May 2007 of its interim results for the six months to 31 March 2007.
Group
Trading in the first five months of the current year has been ahead of
expectations. For the six months to 31 March 2007, organic revenue growth is
expected to be mid single digit and we expect to see approximately 60 basis
points improvement in margins (approximately 40 basis points improvement on an
underlying basis) compared with the same period last year. This positive trend
is being achieved due to the underlying quality of the business combined with
the greater transparency and intensity that is being introduced. The MAP
(Management and Performance) programme is helping to drive revenue in a more
disciplined way with greater focus on like for like growth (throughput) and on
cost reduction.
In the first five months of the year compared with the same period last year, we
have seen a weakening of all the major currencies to which we are exposed. The
impact of this on operating profit for the six months to 31 March 2007 is
approximately £20 million (North America: c.£14m, Continental Europe: c.£2m,
Rest of the World: c.£4m).
Across the World
Trading in North America has been strong and organic revenue growth for the six
months to 31 March 2007 is expected to be mid to high single digit and margins
are forecast to improve by approximately 40 basis points (approximately 20 basis
points improvement on an underlying basis).
In Continental Europe, organic revenue growth for the six months to 31 March
2007 is expected to be slightly ahead of the full year 2006, but still low
single digit. We expect to see good margin growth of approximately 90 basis
points (approximately 60 basis points improvement on an underlying basis). The
acceleration of the expected improvement in the first six months of 2007 is in
part being driven by the pace of the turnaround of poorer performing countries,
notably France, the Netherlands and Italy.
In the UK, revenues and operating profit for the six months to 31 March 2007 are
expected to be in line with the same period last year. We have continued to
strengthen the management team and they are working hard on the challenge of
re-focussing the business for the medium term.
In the Rest of the World, as anticipated, we expect to see mid to high single
digit organic revenue growth for the six months to 31 March 2007 and we expect
to see a good improvement in the margin of approximately 60 basis points.
Selecta
The Selecta sale continues to progress well and is on track to be concluded by
the summer of this year.
Full Year Outlook
Although there are important trading months ahead of us, we are optimistic that
the positive trends seen in the first five months of the current year will
continue. In terms of the phasing, we expect operating profit in the first six
months of 2007 to be slightly higher than in the second six months of the year.
ENDS
Enquiries:
Andrew Martin: 01932 573000
Media: Chris King: 01932 573116
Website
www.compass-group.com
This information is provided by RNS
The company news service from the London Stock Exchange
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