Compass Group, the world’s largest caterer, reported first-half earnings that missed analysts’ estimates as profitability in emerging markets declined.
Underlying group operating profit rose 6.5 per cent excluding currency shifts to £688 million, the company said Wednesday. Analysts expected £692.6 million. The stock fell as much as 3.3 per cent, the steepest intraday drop in almost four months.
Operating margin in the company’s fast growing and emerging markets declined by 0.1 percentage point to 7 per cent. Compass has sought to mitigate the drop by cutting 10 per cent of its employees at its Australian, Brazilian and Turkish food businesses.
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Compass, which serves more than four billion meals a year to over 30,000 clients, said its outlook for the full year remains positive due to its pipeline of new contracts.
Underlying earnings per share rose 12 percent to 28.4 pence. Compass will boost its interim dividend by 11 per cent to 9.8 pence. Sales climbed 5.7 per cent excluding currency shifts and acquisitions to £9.1 billion, led by North America, the company’s largest market.
The shares traded 2.5 percent lower at 1,134 pence as of 8:09am. in London this morning.