Compass Group forecasts 9.5% growth

A spokesman for the contract caterer said organic revenue growth was expected to be around 5.5% for the same period, driven by good levels of new business across the group and a further slight improvement in the rate of retention. There was also "a slight increase" in like for like revenue against the weaker comparatives of the first half of 2010. As expected, he said, the group had seen an increase in the level of food price inflation in the first half of the year and believed this is likely to continue through the second half. "We are managing the effect of this inflation through a combination of menu planning, professional purchasing, ongoing efficiencies and price increases." In the UK & Ireland specifically, he said economic conditions "remain challenging", particularly impacting like-for-like volumes in the business and industry (B&I) sector, which still remain negative. "However, we have made good progress in retention and for the first half of the year we expect organic revenue growth to be broadly flat. This compares to the first half of last year when organic revenue declined by 5.7%. "The underlying operating margin is expected to remain flat. However, the impact of acquisitions made in the previous financial year and associated one-off restructuring costs will result in a reduction in the reported operating margin of approximately 30 basis points."