Compass expects organic growth of five per cent in first half

26th Mar 2013 07:06

Catering and support services giant Compass has said that its forecasts for the full year remain unchanged after a 'good first half' which was helped by a strong performance in North America and emerging markets.Group organic revenue growth is expected to be around 5.0% on a comparable working days basis in the six months to March 31st, which excludes the negative 0.7% impact of the timing of Easter, though this will reverse out in the second half.Organic growth was driven by good levels of new business wins and high rates of retention for the group overall, Compass said. Meanwhile, group operating profit margins have improved by 15 basis points (bps).In the States, organic revenue growth was 8.5% in the first half, with growth seen across all sectors. The operating profit margin has risen by 10bp for the region.Meanwhile, in the Fast Growing & Emerging division, growth was 10%, driven by the oil & gas industry in Australia - said to be contributing "excellent growth" - and strong performances in Brazil and Turkey. Margins rose 20bp.In Europe & Japan however, Compass acknowledged that economic conditions have remained "difficult" with organic revenues down 2.5%. The firm said that it has exited certain contracts that have become uneconomic. Nevertheless, the operating profit margin is expected to increase by over 20bp due to cost reduction plans.The company's statement on Tuesday morning read: "Compass has had a good start to the year and our expectations for the full year remain positive and unchanged. North America and Fast Growing & Emerging are continuing to perform well and we are making good operational progress in Europe & Japan. "Furthermore, we remain positive about the significant structural growth opportunities in both food and support services globally and the potential for further revenue and margin growth."