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Compass First Half Sales Growth of 5 Percent Matches Estimates

March 26 (Bloomberg) -- Compass Group Plc, the world’s largest catering group, reported first-half revenue growth in line with estimates as declining sales in Europe and Japan were partly offset by increases in emerging markets.

Organic revenue has risen almost 5 percent since Sept. 30, the Chertsey, England-based company said today in a statement, matching the median estimate of eight analysts surveyed by Bloomberg News. The company expects to report an increase in operating profit margin of about 15 basis points for the same period, Compass said.

Compass said it expects first-half revenue to decline 2.5 percent in Europe and Japan and this would be part offset by a cost cutting and restructuring program. Business is “positive” in North America and “strong” in fast growing and emerging markets including Brazil and Turkey, where revenue for the half year is expected to have grown by more than 10 percent, it said.

“We are not changing our forecasts today but do expect consensus to be revised positively in light of the recent currency movements,” analysts including Vicki Lee at Barclays Plc in London, said in a note to clients. Barclays will retain its overweight recommendation, according to the note.

Compass will continue a 400 million-pound ($607.5 million) share buyback program between April 1 and May 15, it said. The shares were down 1.3 percent at 8:12 a.m. in London, paring year-to-date gains of 15 percent. First-half earnings are expected to be released on May 15.

To contact the reporter on this story: Janice Kew in Johannesburg at jkew4@bloomberg.net

To contact the editor responsible for this story: Celeste Perri at cperri@bloomberg.net

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