Compass Group PLC is today issuing a trading update ahead of its Annual General Meeting to be held at 12:00 noon today at the Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE. At this meeting, shareholders will be provided with the following update on the Group’s performance since 30 September 2014.
Compass had a strong start to the new financial year. Organic revenue grew 5.7% for the first three months to 31 December 2014. Our focus on organic growth continues to drive strong levels of new business and good retention rates across all regions. Like for like revenue increased in the quarter, reflecting modest pricing and some volume improvement.
Our ongoing commitment to generating efficiencies in the business continues to be supported by our management and performance (MAP) programme. We are using these efficiencies to invest in the exciting growth opportunities around the Group, whilst also improving our operating margin.
North America had a strong start to the year. The trends seen in the second half of 2014 continued into the first quarter of 2015. We had good levels of new business wins, unusually high retention rates and an improvement in like for like revenues in some sectors. Importantly, Europe & Japan returned to growth, driven by good levels of new business wins and better retention. Whilst still negative, like for like volumes have improved. In Fast Growing & Emerging, double digit organic growth in emerging markets, driven by a continued trend to outsourcing, offset volume pressures in some countries due to a mixed macroeconomic back drop, and the expected decline in the Australian offshore and remote sector.
Trading results from our overseas operations are translated at the average exchange rates for the period. Sterling weakened against the US dollar, especially towards the end of the quarter; however, it continued to strengthen against many of the Group’s other key currencies, including the Euro, Yen, Australian dollar and Brazilian real. Taken together, these currency movements, compared to the same quarter last year, had a negative translation impact on revenues and profit in the quarter of £40 million and £2 million respectively.
Compass had a strong first quarter, and we maintain our positive expectations for the full year. However, the economic environment is uncertain in some of our markets, and lower oil prices may impact our oil extraction related offshore and remote business. Our pipeline of new contracts is encouraging, and our focus on organic growth and efficiencies gives us confidence in achieving another year of delivery. In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue and margin growth.