(Reuters) - Compass Group Plc (CPG.L) reported a 7.1 percent rise in full-year profit on Tuesday as cost-cutting efforts at the world’s biggest catering firm paid off and it raised prices.
The caterer has been cutting food, labour and overhead expenses to boost profit, but operating margin remained flat at 7.4 percent due to lower volumes and higher costs at its UK business.
The company said its expectations for full year 2019 were positive, and added it expects organic growth to be in the middle of its 4 percent to 6 percent range. For the previous year, it had forecast organic growth above the middle of the range.
The British company, which serves over 5.5 billion meals a year in more than 50 countries, also said it was managing its portfolio to increase its focus on food and that it was in the process of disposing up to 5 percent of revenues in its non-core businesses.
Underlying operating profit rose to 1.74 billion pounds for the year ended Sept. 30, from 1.63 billion pounds a year earlier, as cost-cutting measures and price increases paid off.
Compass also said it had identified a potential impact on its food supply chain and labour force ahead of the UK’s exit from the European Union, adding that it was taking actions to assess and mitigate any impact.
Shares of the company were up 2.1 percent and were among the top gainers on the UK bluechip index .FTSE.
Reporting by Tanishaa Nadkar and Arathy S Nair in Bengaluru; Editing by Bernard Orr and Sunil Nair