Compass Group PLC is issuing a trading update ahead of its Annual General Meeting to be held at 12:00 noon today in the Live Room, Rugby Football Union, Rugby House, Twickenham, Middlesex TW2 7BA. At this meeting, shareholders will be provided with the following update on the Group’s performance since 30 September 2015.
Compass had a strong first quarter. Organic revenue grew 5.9% for the first three months to 31 December 2015. Our focus on organic growth continues to drive good levels of new business and high retention rates. Like for like revenues increased, driven by modest pricing and some volume improvement.
We continue to drive operating efficiencies around the business, which we are partly reinvesting in the growth opportunities we see across the Group. The previously announced restructuring programme in the Offshore & Remote sector and in some emerging markets is progressing well and is on track to deliver the expected savings.
North America grew organic revenues by 7.9%, driven by growth in technology within Business & Industry, new wins in Healthcare & Senior Living, and a good performance in our Sports & Leisure business. In Europe, organic revenue grew by 3.6%, driven by a continuation of the trends seen in the past twelve months. New business wins have been strong, particularly in the UK and the Mediterranean countries, retention is good and like for like revenues have stabilised. Organic revenue in the Rest of World region was up 3.6%, with robust growth in Spanish speaking Latin America partly offset by the expected weakness in our commodity related business and a challenging environment in some emerging markets.
Currency movements, compared to the same quarter last year, had a negative translation impact on revenues and profit in the quarter of £116 million and £7 million respectively. If current spot rates were to continue for the remainder of the year, foreign exchange translation would positively impact revenue by £253 million and operating profit by £24 million.
Our outlook for 2016 remains positive. Growth in North America is strong, Europe is improving, and we are managing the challenges in the Rest of World region. We continue to focus on driving efficiencies throughout the business and our margin expectations are unchanged. In the longer term, we remain excited about the significant structural growth opportunities globally and the potential for further revenue and margin growth.