Feb. 7 (Bloomberg) -- Compass Group Plc, the world’s largest catering group, reported faster first-quarter sales growth than analysts estimated as “strong” gains in North America offset tougher conditions in Europe and Japan.
So-called organic revenue rose almost 6 percent in the period since Sept. 30, the Chertsey, England-based company said today in a statement ahead of its annual general meeting, compared with the 5 percent median estimate of nine analysts surveyed by Bloomberg News. Company expectations for the year remain “positive and unchanged,” Compass said.
“The language in the statement suggests a very similar picture to that seen in the fourth quarter,” Vicki Lee, an analyst at Barclays Plc in London, said in a note. “We see this as an encouraging start to the year.” Barclays has an overweight recommendation on the stock.
Compass is offsetting tough conditions in Europe by cutting costs and restructuring its business in southern Europe. First-quarter growth was driven by “consistently strong new business levels and high rates of retention,” the company said today.
The shares rose 0.7 percent to 771 pence in early London trading, extending their gain this year to 6.4 percent.
Revenue “is positive overall, but continues to show different trends across the world,” the company said. Business is “positive” in North America, “negative” in Europe and Japan and “strong” in fast growing and emerging markets, it said. U.S. sales were aided by a contract with Ascension Health.
Compass also said today that Chairman Roy Gardner will step down at next year’s annual meeting. A recruitment firm will be appointed to seek a replacement.
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