Compass 2011 Sales Growth Tops Estimates on New Business
Revenue excluding currency effects or sales at operations owned less than a year will rise 5 percent in 12 months through tomorrow, the Chertsey, England-based company said today in a statement. That beat the 4.4 percent median increase estimated by three analysts surveyed by Bloomberg.
“We’ve got really positive trends on winning contracts and also feel pretty good about retention rates,” said Chief Executive Officer Richard Cousins in a phone interview. The 4 percent growth rate of the fourth quarter is “not a bad guide” for 2012, he added.
Compass, which provides food to delegates at Group of 20 meetings, has increased the proportion of sales it generates in the U.S. and other non-European markets, including Brazil and China. The company said economic conditions in parts of mainland Europe were “challenging.”
“When you are exposed to countries like Mexico, Colombia, Brazil, Turkey, India, China, Russia, you naturally grow in those countries at anywhere between 10 and 30 percent, whilst in the U.K. and Europe you tend to naturally grow at half a handful percent,” said Cousins. “It is a reflection of the change in the global economic balance.”
In North America, Compass said it expects organic revenue growth for the year of about 7 percent, and 9 percent in its rest of the world division, which includes Latin America and China. In continental Europe, organic revenue growth for the full year to be will be about 1 percent, while sales will decline by about 1 percent in the U.K. and Ireland division.
The operating-profit margin for the full year is expected to match last year’s figure, the company said. Compass is scheduled to release fiscal 2011 earnings figures on Nov. 23.
Compass is interested in small to medium acquisitions and will continue to look at food-service companies in developing countries and support services in Europe and North America, said Cousins.
The shares fell as much as 2.6 percent and traded down 1.8 percent at 520 pence as of 1:32 p.m. in London. Compass has fallen 11 percent in London this year, more than the 3.6 percent decline for Sodexo (SW) in Paris.
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