26 November 2019 | Marino Donati
Compass Group has reported a revenue increase of 6.4 per cent for the 12 months to September 30 in its full-year results. However, it added that a deteriorating macro environment in Europe had affected the business.
Although its European business saw growth of 4.1 per cent over the period, this was due to strong performances in UK defence and sports, and leisure, offsetting business and industry volume weakness.
The company said it had taken action to adjust its cost base, which would result in non-underlying cash charges of around £160 million over 2019 and 2020, and a non-cash charge of £140 million.
Group chief executive Dominic Blakemore said: "Despite this good performance, we are not immune to the macro environment. Deteriorating business and consumer confidence in Europe has impacted our business and industry volumes, new business activity and margin. Given these trends, we are taking prompt action in Europe and certain Rest of World markets to adjust our cost base. As well as offsetting short-term margin pressures, by taking this action from a position of strength, we will be better placed to capitalise on future growth opportunities."
Revenue for the year was £25.15 billion. Operating profit for the group for the period was £1.9 billion, up £84 million or 4.7 per cent on constant currency basis. Operating margin was maintained at 7.4 per cent. North America saw revenue growth of 7.7 per cent over the year.
The group said that in 2020 it expected organic growth around the mid-point of its 4-6 per cent guidance range, while maintaining a strong margin.
Blakemore said: "Our expectations for the group in 2020 are positive, although we remain cautious on the macro environment in Europe."