Compass Q3 margins improve as sales deteriorate

23rd Jul 2009 07:30

Catering giant Compass said operating profit, margins and free cash flow continued to grow in the third quarter while revenue growth slowed.The group, which provides catering for schools and offices, said continued cost cuts and the weaker pound helped it through 'more challenging economic conditions'.In the first nine months of the year, revenue growth on a constant currency basis was 1.8%, and organic revenue growth was 0.8%. "Looking forward to the full year, revenue growth on a constant currency basis is expected to be around 1% and organic revenue growth is expected to be broadly flat," the group said in a company statement.As anticipated, like for like volumes in Business & Industry and Sports & Leisure continued to slow, as demand in event catering and corporate hospitality fell, it added. Reduced headcounts and shorter working hours also hurt business. Slowness in event catering and corporate hospitality for the year has however been offset by a solid performance in the Education, Healthcare and Defence, Offshore and Remote Site divisions, Compass said.