Compass Group PLC (LON:CPG) today issued a trading update ahead of its Annual General Meeting to be held at 12:00 noon today in the Live Room, Rugby Football Union, Rugby House, Twickenham, Middlesex TW2 7BA. At this meeting, shareholders will be provided with the following update on the Group’s performance since 30 September 2018.
Compass’ organic revenue for the three months to 31 December 2018 grew by 6.9% driven by strong levels of new business wins, continued good retention rates and bolstered by the impact of the new UK Defence contracts and a positive sporting events calendar.
We continue to generate efficiencies through our management and performance (MAP) programme to offset inflationary headwinds.
Organic revenue in North America increased by 8.0%. Growth was very good across all sectors particularly in Business & Industry and Sports & Leisure, the latter of which benefited from the timing of certain events.
In Europe, organic revenue grew by 6.4% reflecting continued momentum from new business wins, notably the significant impact of Defence contracts in the UK mobilised in the second half of 2018, a beneficial Sports & Leisure calendar and continuing good growth in Continental Europe.
Organic revenue in Rest of the World increased by 2.8%, with ongoing good performance in developing markets partially offset by the run-off of the last Offshore construction project in Australia.
Currency movements, compared to the same quarter last year, had a positive translation impact on revenues and profit in the quarter of £107 million and £10 million respectively. If current spot rates were to continue for the remainder of the year, foreign exchange translation would positively impact 2018 revenue by £508 million and operating profit by £43 million.
Acquisitions and disposals
In the first quarter the Group spent £197m on acquisitions in North America. Targeted and disciplined bolt-on acquisitions, focused on our core food offering, strengthen our capabilities and there is a good pipeline of opportunities across the Group.
We continue to make progress on the disposal programme. We will provide a full update at the Half Year results.
We had an excellent start to the year and now expect to be slightly above the middle of our target 4-6% organic growth range for the full year, with modest margin progression. In the longer-term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue growth and margin expansion.