Compass beats forecast

LONDON (Reuters) - Compass Group (CPG.L), the world's biggest caterer, beat forecasts with a 29 percent rise in first-half profit on Wednesday and unveiled plans to buy back 400 million pounds of its shares over 18 months.

The firm, which employs over 350,000 people to feed office workers, soldiers and schoolchildren, said it made a profit before tax and one-off items of 289 million pounds in the six months to March 31.

Forecasts ranged from 270 to 282 million in a Reuters poll of seven analysts.

Compass, which counts Chelsea football club, the Wimbledon tennis tournament and the Bank of England among its customers, said it was confident about prospects for the second half of its financial year and that it was changing menus and raising prices to cope with food price inflation.

The firm said it continued to see food price inflation of 4-5 percent, but that its attempts to mitigate this were taking around 1 percentage point off that total and it had still managed to deliver a 60 basis point increase in operating margin during the first half.

Compass shares have outperformed the DJ Stoxx European travel and leisure index .SXTP by about 25 percent over the last 12 months. They closed at 342.25 pence on Tuesday, valuing the business at about 6.6 billion pounds.

(Reporting by Mark Potter, editing by Will Waterman)