Compass Sales Growth Returns To Trend In 3Q

28th Jul 2010 07:42

By Michael Carolan Of DOW JONES NEWSWIRES LONDON (Dow Jones)--U.K.-based caterer Compass Group PLC (CPG.LN) Wednesday posted a sharp acceleration in sales growth in the third quarter as it returned to its long-term sales target quicker than expected. The company said in a trading update that organic sales, which strip out acquisitions, grew 5.5% on a constant currency basis in the three months to June 30, compared with a rise of just 0.4% in the first six months of the year. Chief Executive Richard Cousins told Dow Jones Newswires earlier this month the company would accelerate its sales growth in the second half. He said the company was aiming to return to its trend revenue growth rate of 5% to 7%, but over the next 18 months to two years rather than immediately. The strong growth was driven by increased new business wins as well as a slight improvement in the rate of contract retention. For the first nine months of the year, sales are running 2% higher on the year and the company said it expects the full-year figure to be more than 2.5%. Cost savings resulted in a 0.35% rise in the company's margin in the period. "The ongoing focus on operating efficiency should, after reinvestment, enable us to deliver further progress in the operating margin compared to the same period last year," the company said. The focus on efficiency and costs under Cousins has seen Compass's operating margin grow to 7% from 4.5% during his time in charge. Ultimately, the company targets a margin of 8.5%. Cousins joined the 400,000-employee group in summer 2006. Since taking the helm, he has withdrawn the company from around 50 countries and sold a number of non-core businesses. The group's resilience in the consumer downturn has seen its shares in the last year climb almost 80% to close Wednesday at 558 pence. -By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; [email protected] (END) Dow Jones Newswires July 28, 2010 02:42 ET (06:42 GMT)