The world’s largest foodservice company, Compass Group, has seen its pre-tax profits dip by 8.6 per cent.
Accounts filed at Companies House for the year to 30 September 2013 show the company made a reported pre-tax profit of £721 million, compared with £789 million in the previous year.
Covering all global operations, group revenue was up 3.9 per cent on 2012 to £17.6 billion, the UK and Ireland accounting for £1.8 billion of that figure. Total operating profit, on a constant-currency basis, was £1.3 billion, representing the first time the company has reported an operating margin of over 7 per cent.
Europe and Japan, a region comprising 23 countries, saw its contribution to group revenue fall by just over £200 million. The group, which is headquartered in Surrey, blamed tough economic conditions in Europe for the decrease.
Outgoing Compass Group chairman, Sir Roy Gardner, said: “In my last year as chairman, I am delighted to report another successful year in which we have grown revenue and operating profit, delivering a margin of over 7 per cent for the first time.
“This is a remarkable achievement, and I am immensely proud of the hard work and commitment shown by my colleagues around the group.
“As I prepare to hand over the chairmanship to my successor, Paul Walsh, I am confident that I am leaving the business in very good shape.”
Three-quarters of the firm’s annual revenue came from food in the year to 30 September 2013. It also has stakes in cleaning, healthcare and hospitality businesses.
Compass Group chief executive Richard Cousins said: “Food remains our core business. The structural opportunity in the outsourced foodservice market, estimated at £200 billion, is a key growth driver. With only around 50 per cent of the market currently outsourced, it represents a significant opportunity.
“We believe the benefits of outsourcing will become ever more apparent as economic conditions and legislative changes put increasing pressure on organisations’ budgets.”
The group added that despite steady progress having been made in the UK, with operating profit up by £10 million in the last two years, the significant increase in UK gilt rates - the rate of interest paid on a government security - over the last year has increased its capital costs.
Key Compass Group contracts in the UK include National Grid, the Jockey Club, and Henley Royal Regatta, although more than 90 per cent of the firm’s revenue is now generated outside the UK.
Gardner, who is a former chairman of Manchester United FC, added: “Looking ahead to next year, we anticipate economic conditions in Europe and Japan will remain challenging. But the actions we are taking give us confidence in another year of delivery.”
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