Compass beats expectations

Catering giant Compass posted a sharp rise in pre-tax profits in the six months to 31 March as it expanded in overseas markets while continuing to implement margin-boosting efficiency measures.Pre-tax profits climbed to £531m from £462m the previous year on revenues that climbed to £7.873bn from £7.104bn. The performance was ahead of the revenue and profit rise predicted by the broker Charles Stanley.Revenues were up by 5.7% excluding the impact of acquisitions. Compass said that on a like-for-like basis, there was a small increase in revenue growth. Progress on efficiency added another 20 basis points to the company's operating margin.Compass has been busy on the acquisition front and announced today that it is acquiring the remaining 50% of its business in Turkey."I am delighted with the progress the Group has made, delivering another excellent performance, despite some geographies remaining economically challenging," said chairman Sir Roy Gardner. "We have significant opportunities to expand the business and Compass is well placed to exploit the structural growth potential in the food and support services market around the world."The company said it had seen a good start to the current year, with strong organic revenue growth and more margin improvements."As we look out to the second half, we are encouraged by the pipeline of new business and the ongoing opportunities we have to generate further efficiencies," the company said. "After absorbing the expected profit impact of the tragic events in Japan, our expectations for the full year remain unchanged."---RG Compass Group