Food and support services company Compass Group Plc. said that it expects organic revenue growth for the first half to be just over 4%, with an increase in the operating profit margin of around 10 basis points. Organic revenue in the first half has been driven by continued high levels of new business, stable retention rates and positive like for like revenue growth.
Organic revenue growth of just over 4% includes a benefit of about 0.4% from the timing of Easter, which will reverse in the second half. The underlying trends in its three regions have been consistent throughout the first two quarters with strong growth in North America and the Fast Growing & Emerging region and signs of stabilisation in Europe & Japan.
For the half year, the company expects a negative currency impact of approximately 5.5%, or 486 million pounds, on revenue and 5.7%, or 37 million pounds, on underlying profit. If the current spot rates were to continue through the second half of 2014 it would expect a negative currency impact of 5.9%, or 1.029 billion pounds, on 2013 full year reported revenues and 6.2%, or 78 million pounds, on 2013 full year underlying profit. The impact of currency movements is translation only.
Compass said it has had a good start to the year and its expectations for the full year remain positive and unchanged, notwithstanding the translation impact of ongoing movements in foreign currencies. In the longer term, the company said it remains excited about the significant structural growth opportunities in both food and support services globally and the potential for further revenue and margin growth.
