Compass has announced good H1 results and a change of look for its motorway restaurants. The catering group, recently spun off from Granada, has grown both organically and through its integration with Granada’s restaurant business. The coming year won’t be its easiest, but with the sale of its hotel assets, Compass should be able to further secure its position as a strong food service organization on an international level.
Changes are afoot on your local motorway. Compass, the catering group that owns Granada motorway services, outlined plans to rebrand the well-known chain as it announced its H1 results. The company is worried that the public’s opinion of Granada has moved too far away from the ‘quality and value’ image it would like. The new look services will be renamed ‘Moto’ and sell food at high street prices.
The rest of the business has been doing well. After rival Sodexho Alliance warned last week that foot and mouth would hurt profits, there were fears that other food service businesses may also be affected. But Compass has emerged relatively unscathed so far, losing just 1% of sales on the back of cancelled sports events. And such eventualities are covered by insurance, the company was quick to point out. The diversity of the business also helped to ensure that the effect was minimal.
The business as a whole saw profits before interest, goodwill, amortization and exceptional items increase by 108% to GBP268 million while turnover rose 53% to GBP4.08 billion. The bulk of this increase is due to the inclusion of Granada Restaurants, whose results were reported separately until Compass was demerged from Granada plc. On a like-for-like basis, operating profit was up 13% and turnover 8%.
The group seems to be doing well despite difficulties that have hurt profits in many smaller companies. Compass’ ability to maintain a strong position in both the UK and the US, despite the foot and mouth outbreak and the economic downturn, is encouraging. Compass now seems to be angling itself into an even cozier position through non-organic growth. Already the number one foodservice company in the UK, the group has been selling off its hotels to eliminate debt and finance a $1 billion acquisition plan. Compass’ aim to strengthen its international operations in Asia, continental Europe and the US should further protect the group against downturns in any one area.
(c) 2001 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.