Cost cuts help Compass to point north


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Compass Group believes there will be lots of new business opportunities over the next three years as Britain is forced to outsource more public sector work in order to balance the books.

The world's biggest caterer, which makes the sandwiches and hot food for 17 of the 20 biggest banks in the City, said its costcutting drive was paying off as the £161m it saved from overheads helped boost annual pretax profits by 36pc to £773m.

Sandwiches

Profits in North America are up 12.5%, in Continental Europe 4%, the UK 5.5% and the rest of the world 22%

The earnings helped chase Compass's shares to a seven-year high, closing up 24.6p at 426.6p.

Compass chief Richard Cousins said the group would 'probably not' make the same level of cost savings again this year, adding: 'But we are focused on very significant savings again.'

Revenues totalled £13.4bn last year, up 17.5pc. But after stripping out the impact of acquisitions it was flat. The total dividend was raised 10pc to 13.2p.

Cousins believes Compass is well positioned to win any work that is outsourced by both public and private sector bodies as they seek to cut costs. He said: 'Over the next two or three years the British government, and others around the world, will have to take costs out of healthcare and education budgets.'

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