Military contracts help Compass Group revenue grow 6.9%

UK-based contract caterer Compass Group saw its organic revenue grow by 6.9% for the three months to 31 December 2018.

The group attributed its growth to “strong levels of new business wins”, continued good retention rates. It also said the impact of the new UK Defence contracts and a “positive” sporting events calendar helped bolster its performance.

Organic revenue in North America increased by 8% and the company said growth was “very good” across all sectors particularly its business and industry arm. Its sports and leisure sector also did well, benefiting from the timing of certain events.

In Europe, organic revenue grew by 6.4% due to the “significant impact” of Defence contracts in the UK mobilised in the second half of 2018. Compass also said revenue was boosted by a “beneficial” sports and leisure calendar and continuing good growth in continental Europe.

Organic revenue in the 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. In the first quarter, the group spent £197m on acquisitions in North America.

Compass Group said: “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.”