Revenue and profits have increased at global catering group Compass in what Chief Executive Dominic Blakemore (pictured) described as “another strong year” for the company.
Compass reported that, in the year to 30 September 2019, underlying revenue by 6.4% to £25.15bn, while underlying operating profit increased 4.7% to £84m. The North America market led the way, with organic revenue growth of 7.7%.
In Europe, the group said the wider economic picture was deteriorating and it would be making a £300m writedown with up to 3,000 redundancies among Compass’s 600,000 global staff expected. With sectors in Europe such as automotive, steel and finance struggling, fewer staff were attending the canteens run by Compass.
Although Brexit had seen a challenging 18 months for the company in the UK, Blakemore said that there had been a “more dramatic hit” on its continental business in the fourth quarter, notably in France, Germany, the Netherlands and Spain, with multinationals operating there shedding thousands of jobs.
“Deteriorating business and consumer confidence in Europe has impacted our Business and Industry volumes, new business activity and margin,” said Chief Executive Dominic Blakemore (pictured above).
“Given these trends, we are taking prompt action in Europe and certain Rest of World markets to adjust our cost base. As well as offsetting short-term margin pressures, by taking this action from a position of strength, we will be better placed to capitalise on future growth opportunities,” he added.
Blakemore expected organic growth to be in the 4-6% range with strong margins maintained.
He said: “In the longer term, we remain excited about the significant structural growth opportunities globally, the potential for further revenue and profit growth, combined with further returns to shareholders.”