Compass makes decent start, but currency rates could impact annual figures

6th Feb 2014 07:04

- Currency movements to impact full-year results- Organic revenues up four per cent in Q1Catering giant Compass has kept its forecasts for full-year organic results unchanged after a "good" first quarter, but warned that adverse currency movements may dampen statutory numbers. Nevertheless, the new fiscal year, which began on September 30th, started well with organic revenues 4% ahead of the previous year at constant currency. This was more or less in line with the 4.3% growth registered for the whole of last year.Compass said it delivered good levels of new business, the retention rate has remained stable and like-for-like (LFL) revenue trends continue to be positive.The North America region has traded well, the company said, though LFL revenues remain broadly flat. In Europe and Japan, organic revenues continue to fall due to difficult economic conditions, though that it is seeing "some signs of stabilisation".Elsewhere, the company said that trends in the Fast Growing & Emerging regions remain strong, underpinned by the continuing trend to outsourcing."Compass has had a good first quarter and our expectations for the full year remain positive and unchanged, notwithstanding the translation impact of ongoing movements in foreign currencies," the firm said in a statement on Thursday.The group highlighted the strength of sterling during the first quarter against many of its other key currencies - US dollar, euro, yen, Australian dollar and Brazilian real. It warned that if current rates are sustained for the whole year, it would have a negative impact of 5.4%, or £942m, on full-year revenues compared with the prior year. Underlying profits would feel a 5.7% (£72m) impact.BC