London - Britain's Compass Group, the world's biggest catering firm, expects first-half underlying revenues to rise around 5.5 percent after seeing a return to growth in Europe and Japan and strong demand in its North American business.
The company said on Monday organic revenue growth - which excludes acquisitions - in North America for the period ended March 31 was expected to be around 8 percent, helped by new business and unusually high customer retention rates.
Europe and Japan also returned to growth, with organic revenue growth expected to be around 0.5 percent, despite a mixed economic backdrop across the regions.
However, the firm cautioned the economic environment in some of its emerging markets was uncertain and lower commodity prices were affecting its offshore and remote business. It expected to post organic revenue growth of 8 percent in the region.
“The company indicates that the economic background in Europe and Japan is mixed and that the growth shown is against lower volumes, but we still see the change as a potentially calling the start of the turnaround,” said analyst Stephen Rawlinson at brokerage Whitman Howard.
Compass, which serves around three billion meals a year, said the strength of sterling against currencies such as the euro, Australian and Canadian dollars, yen and Brazilian real, was expected to have a positive impact on half year revenue and profit of 35 million pounds ($52 million) and 5 million respectively, compared with the same period a year earlier.
Shares in the company were broadly flat at 1,181 pence by 07h04 GMT.
Reuters