Compass posts bullish start to year but warns on oil price fall

 
Kasmira Jefford
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COMPASS Group, the world’s biggest catering firm, yesterday hailed a strong start to the new year after seeing a return to growth in Europe and Japan, but warned of the impact of falling oil prices.

The company, which serves around 3bn meals a year, said organic revenue increased by 5.7 per cent in the first three months to 31 December, after winning new contracts in North America as well as in Japan and Europe.

Its Fast Growing & Emerging markets division also reported double digit organic growth despite an expected decline in the Australian offshore and remote sector, the company said.

Compass provides catering for oil rig workers, under its remote and offshore division. It warned that lower oil prices, which have more than halved since June 2014 and sparked a spate of cutbacks in the industry, could harm its business.

A strengthening of the sterling against key currencies like the euro, yen and Australian dollar also had a negative impact on revenues and profit in the first quarter of £40m and £2m respectively.

However, despite economic uncertainty in some of its markets, Compass said it remained on track to meet full-year forecasts.

“Our pipeline of new contracts is encouraging, and our focus on organic growth and efficiencies gives us confidence in achieving another year of delivery,” the group said at its annual general meeting.

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