By Adam Clark
Compass Group PLC (CPG.LN) said Wednesday that pretax profit fell in the first half of financial 2018 due to foreign exchange effects, and it reaffirmed its full-year guidance.
Pretax profit for the six months to March 31 dropped to 792 million pounds ($1.07 billion) from GBP831 million, the catering-and-facilities company said. Operating profit fell 2.7% to GBP853 million, it said. Compass said the profit fall was driven by a 5.3% hit due to foreign exchange effects, partially offset by 4.5% underlying operating profit growth.
Revenue declined 0.8% to GBP11.38 billion, which Compass said was due to a 6.3% hit from foreign exchange. On an underlying basis revenue rose 4.8%, it said. Excluding the effects of weather and Easter timing, organic revenue rose 5.3%, said Compass.
Compass said it delivered strong performance in North America, where organic revenue grew 7.3%. Organic revenue in Europe rose 0.5% with good growth in the U.K. Compass said its rest of world segment grew 3.4%, reversing a 3.8% decline in the first half of the prior financial year.
The company's operating margin came to 7.5%, down by 10 basis points. Compass said a drive for efficiencies and pricing strategy largely offset cost inflation, and there are further benefits of its measures to address cost inflation in the U.K. to come in the second half.
Compass declared an interim dividend a share of 12.3 pence, up by 9.8% from the prior year. The company reaffirmed its first-quarter guidance that it expects to be above the midpoint of its organic-growth target range of 4%-6% in the full year, and said it is reviewing its portfolio to simplify the business.