Trading Update

Compass Group PLC
28 September 2005


          Trading & Business Review Update, Sale of Travel Concessions

28 September 2005

Prior to the close period and ahead of the announcement of its preliminary
results for the year to 30 September 2005 on 29 November 2005, the Group today
issues the following trading update. Following the business review initiated
earlier this year, the Group also announces the intention to sell its UK and
Continental European travel concessions operations ('SSP').

HIGHLIGHTS

• Trading:
    -  On track for around £350 million free cash flow (at 2004 exchange rates)
    -  Turnover growth (on a like-for-like basis) and operating profit (before
       goodwill and exceptional items) expected to be around 6% and £710 million
       respectively
    -  Earnings Per Share (before goodwill and exceptional items) expected to
       be around 19.0 pence
    -  Strong trading in North America and Rest of the World regions
    -  Continental Europe in line with expectations
    -  Actions in place to improve performance in the UK
• Key decisions arising from the business review:
    -  Focus on core contract catering operations and continue to build on
       growth in the support services business
    -  Sell the UK and Continental European travel concessions operations
    -  Simplified management structure (8 divisions to 4)
    -  New UK management team
    -  Accelerated overhead savings, on track for £50 million in 2006

TRADING

Group

Trading across the Group in the second half has continued the trends seen in the
first half and has been strong in North America and the Rest of the World
regions, particularly Australasia and Japan. Continental Europe has traded in
line with expectations. In the UK trading has remained subdued and management
has in place actions to improve performance.

Full year operating profit (before goodwill and exceptional items) is expected
to be approximately £710 million.

UK

In the contract business, like-for-like turnover growth is expected to be around
5% and the operating profit margin is expected to be around 6%. As indicated in
May, and in common with many other consumer-facing businesses, the challenge has
been to pass on all the labour and food cost increases incurred by the business.
This is particularly the case in the Business & Industry sector. Margin has also
been impacted by a number of strategic initiatives, including:

   • Focus on winning and retaining contracts with a lower level of capital
     investment
   • Programme of action to create a more robust and sustainable contract
     base
   • Acceleration of the UK reorganisation by the new management team, with
     an £8 million cost in 2005 against operating profit

In concessions, like-for-like turnover growth is also expected to be around 5%
and the operating profit margin is expected to be around 10%. We have seen a
good performance in the air business in particular, but with similar pressures
in terms of labour and food costs as in the contracts business. In the second
half, profits have been impacted by the London bombings (£6-8 million) and the
disposal of the Gatwick Meridien hotel (£4 million).

Overall, like-for-like turnover growth in the UK is expected to be around 5%
with full-year operating profit of approximately £200 million (excluding fuel).
Properly executed, the actions we are taking should enable us to deliver a
similar level of profit and margin in 2006 as for 2005, before adjusting for the
impact of the sale of SSP. Thereafter, as a result of actions taken, we expect
the UK to return to profit growth, on a sustainable basis.

Continental Europe & Rest of the World

Full year like-for-like turnover growth is expected to be around 3% with a good
performance in Rest of the World driven by strong new business wins in Japan and
Australasia, partly off-set by more challenging conditions in France, Germany,
Holland and Italy. Excluding turnover from our military operations in the Middle
East, like-for-like turnover growth is expected to be around 5%.

Operating profit margins for Continental Europe and Rest of the World should be
broadly in line with last year.

As communicated in March, the Group is seeing a decline in the scale of its
military business in the Middle East with turnover expected to fall from around
£250 million in 2004 to around £170 million in 2005, and operating profit
(before exceptional items) in 2005 expected to be around £35 million. There are
still opportunities for military business in the Middle East but increasingly
the Group is choosing not to participate in this work because the margin is
becoming less attractive relative to the complexity of the operations and the
associated risk. We therefore expect to significantly scale back these
operations in the Middle East and for operating profits in 2006 to reduce to no
more than £5 million. In the light of this reduction in activity, we estimate
asset write-downs of around £40 million will be required and these will be
reported as an exceptional item.

Excluding the military operations in the Middle East (referred to above), early
indications suggest that we will see similar trends in 2006 as seen in 2005.

North America

As indicated in May, like-for-like turnover growth is expected to be
approximately 11% for the full year with strong performances across all sectors.
In Healthcare, Morrison's and Crothall's like-for-like turnover growth will be
around 15% ahead of last year. This strong growth reflects our ability to offer
bundled catering and support services. Sports & Leisure will also see
like-for-like turnover growth of around 15%. Full year margins are expected to
be broadly in line with last year.

Looking forward, early indicators for 2006 are encouraging.

Profit Before Tax

Group profit before tax (before goodwill and exceptional items) for the full
year is expected to be approximately £580 million.

Tax

For the full year, tax on profit on ordinary activities (before goodwill and
exceptional items) is expected to be 23% - 24%.

Free Cash Flow

Free Cash Flow for the full year is expected to be in line with our previous
guidance at around £350 million at 2004 exchange rates.

Earnings Per Share

For the full year, basic earnings per share (before goodwill and exceptional
items) are expected to be approximately 19.0 pence.

Business Review Update

The Group today announces its decision to:

• Focus on its core contract catering operations and continue to
  build on the growth in support services in order to maximise shareholder value
• Sell the UK and Continental European travel concessions operations ('SSP')
• Reorganise and simplify the Group's management structure, rationalising the 
  number of operating divisions from 8 to 4, namely: UK, Middle East & Africa; 
  Americas; Continental Europe; and Rest of the World
• The programme of overhead savings announced in May has been accelerated with 
  the full £50 million target being achieved in 2006

In July, Peter Harris was appointed CEO of the newly merged UK, Middle East &
Africa division. Under his leadership, the new management team has put in place
a programme of action to create a more robust and sustainable contract base.

On 15 September, the Group announced that Sir Roy Gardner, CEO of Centrica Plc,
will be joining the Board as Senior Independent Director on 1 October 2005 and
that he would succeed Sir Francis Mackay as Chairman during 2006.

Sale of SSP

SSP represents one of the market leaders in travel concessions. It has market
leading positions in many of the 25 countries in which it operates and provides
catering for roadside, railway and airport concessions, principally in the UK
and Continental Europe. In the year ended 30 September 2005, SSP's revenues
(including fuel) are expected to be approximately £1.9 billion (£1.4 billion
excluding fuel), EBITDA (including fuel) of approximately £160 million, and EBIT
(including fuel) of approximately £115 million. We will retain a small part of
the Concessions business, mainly in Japan, Portugal and the US where the
operations are very closely integrated with the rest of the business.

Whilst the travel concessions market offers considerable further growth
opportunities, the sale of SSP will allow management to focus solely on the
Group's core contract catering operations and the growth of its support services
business. The Board believes that in the longer term this focus will improve the
Group's financial performance and drive greater value for shareholders.

The Group expects to launch a formal sale process for SSP before the end of the
calendar year and is being advised by Citigroup. The Group will retain exclusive
use of the SSP brand portfolio in its core contract catering markets (as it has
in other business disposals such as Little Chef and Au Bon Pain) and will seek
to ensure that it retains economies of scale through a purchasing supply
contract with SSP. Proceeds from the sale will be used principally to reduce
debt and strengthen the Group's balance sheet position, with the balance being
returned to shareholders.

This sale should deliver a one-time step up in Return on Capital Employed (ROCE)
of around 30 basis points, which is in addition to our three-year target of a
100 basis point improvement in ROCE between 2006 and 2008. As a consequence of
the sale, the Group's free cash flow target will be revised to £800-850 million,
subject to final terms and use of proceeds.

Andrew Lynch, CEO of SSP, will step down from the Compass Group PLC board as of
today, after nine years, to focus fully on the management of the SSP business.

Michael J. Bailey, Chief Executive, said:

'The business review has led us to make significant decisions which, I believe,
will improve financial performance and deliver value for shareholders.
Simplifying our structure, focusing on contract catering and building our
support services business will enable us to maximise the opportunities which our
global platform and scale give us.

I am pleased with how our businesses in North America and Rest of the World
regions are performing. In the UK, actions are underway to improve financial
performance and I believe this will result in a turnaround over the next 24
months.

For the Group as a whole, quality of service and entrepreneurial spirit remain
key to our success. This, coupled with the increased financial rigour we have
introduced, will deliver strong free cash flow generation and improving returns
on capital employed over the medium term.'

Notes

Compass Group PLC is the world's leading foodservice company providing food,
vending and related services to clients and customers in the workplace, at
school and colleges, hospitals, on the move, at leisure and in defence, offshore
and remote locations. Compass Group has annual revenues of £12 billion and
employs 400,000 people in over 90 countries.

SSP operates at over 400 sites at airports, railway stations and motorway
service areas principally in the UK and Continental Europe. It has operations in
some 25 countries, the most material being the UK, France, Spain, Germany and
the Nordic region. It operates more than 1,400 separate units, including outlets
with Compass brands (e.g. Ritazza, Upper Crust, Harry Ramsdens, Millie's
Cookies, Moto, WhistleStop) and franchised brands (e.g. M&S Simply Food, Burger
King).

Today, the Group sets out a number of recent contract wins in Appendix 1.

The financial statements for the year ending 30 September 2005 will be reported
in accordance with United Kingdom generally accepted accounting principles ('UK
GAAP'). Those for the year ended 30 September 2006 will be reported in
accordance with International Financial Reporting Standards ('IFRS') issued by
the International Accounting Standards Board ('IASB'). Comparative information
for the year ended 30 September 2005 will be reissued on an IFRS basis, with
appropriate reconciliations to the previously reported UK GAAP position and
results, in the first quarter of 2006.

Presentation / Webcast
A presentation for analysts and investors will take place at 9:30 am on 28
September 2005 at the Lincoln Centre, 18 Lincoln's Inn Fields, London WC2A 3ED.

The live presentation can also be accessed via both a webcast and dial-in
teleconference starting at 9:30 am:

   • To listen to the live presentation via teleconference, dial (UK) +44 20
     7365 1854.
   • 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 replay recording of the presentation will also be available via teleconference
and webcast:

   • A teleconference replay of the presentation will be available for five
     working days, until x September 2005. To hear the replay, dial (UK) +44 20
     7784 1024 or (US) [phone]. The replay passcode is 8449438#.
   • 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
Investors/Analysts:        Sarah Ellis                [phone]
Media:                     Paul Kelly                 [phone]

Brunswick
Simon Sporborg / Pamela Small                         [phone]


Appendix 1
Please find below new contract gains announced today.


B&I

• Switzerland - Swisscom awarded Compass Group (Suisse) SA a new five-year
  contract with annual turnover of £13.3 million.
• Norway - DnB NOR awarded Eurest a new three-year contract with
  annual turnover of £3.4 million.
• France - Sollac Loraine awarded Eurest a new five-year contract with annual 
  turnover of £1.4 million.

Defence, Offshore & Remote Site

• France - the Army Ministry (Paris) awarded Eurest a new one-year contract with 
  annual turnover of £2.2 million.
• Russia - Globalstroi-Engineering awarded ESS (Eurest IoCa) a new two-year 
  contract with annual turnover of £2.6 million.
• Bosnia Herzegovina - EUFOR awarded ESS a new three-year contract with annual 
  turnover of £4.3 million.
• Argentina - Minera Alumbrera Limited awarded ESS a new three-year contract 
  with annual sales of £2.0 million.

Healthcare

• France - Association Notre-Dame de Bon Secours (Paris) awarded Medirest a new 
  three-year contract with annual turnover of £1.2 million.
• USA - Hospital of the University of Pennsylvania (PA) awarded Morrison 
  Management Specialists in conjunction with Crothall a new five-year contract 
  with annual revenues £11.5 million.
• Germany - University Hospital Bonn awarded Clinic Catering Service (CCS) a 
  new ten-year contract with annual turnover of £1.2 million.

Education

• USA - University of West Florida (FL) awarded Chartwells a new eight-year 
  contract with annual turnover of £1.1 million.
• USA - UNC Asheville (NC) awarded Chartwells a new eight-year contract with 
  annual turnover of £1.6 million.
• USA - Wentworth Institute of Technology (MA) awarded Chartwells a new 
  seven-year contract with annual turnover of £2.2 million.

Sports & Leisure

• UK - The New Stadium (Swansea) awarded FMC a new ten-year contract with annual 
  turnover of £1.5 million.
• Japan - Angel Corporation awarded Seiyo Food Systems a new four-year contract 
  with annual turnover of £1.2 million.
• Australia - Campus Living (Sydney Univ. Village & RMIT Village) awarded Eurest 
  a new ten-year contract with annual sales of £1.7 million.

Vending

• Netherlands - Paresto (MOD) awarded Selecta a new five-year contract with 
  annual turnover of £2.9 million.
• Sweden - SAAB awarded Selecta a new three-year contract with annual turnover 
  of £0.7 million. 

Travel Concessions

• Spain - AENA awarded SSP Spain a new ten-year contract with annual
  turnover of £1.5 million at Son Sant Joan Airport (Palma de Mallorca).
• Egypt - Cairo Airport Company awarded Louis Catering / SSP a new ten-year 
  contract with annual turnover of £1.6 million at Cairo International Airport.




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