Corporate cuts hit catering giant

Post by **TrueBlueTerrier** » 24 Jul 2009, 15:23

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Catering group Compass says corporate hospitality spending cutbacks, job losses among clients and shorter working hours have hit its business.

It said revenues for its financial year would grow by just 1%. The news sent its shares down more than 7%.

"Revenue growth has continued to slow as a result of the more challenging economic conditions," the firm said.

In the UK, Compass's customers include Asda and the Royal Mail. It also operates in 55 countries worldwide.

Compass said it had seen trading at both its Business & Industry and Sports & Leisure units hit by the recession.

However, it said it had seen "good growth" in underlying revenues in its education, defence and healthcare divisions.

Revenues were up 1.8% in the nine months to 30 June, after exchange rate movements were stripped out. However, this was lower than the 3.6% growth rate seen in the first half of its financial year.

Compass shares were the worst performing in the FTSE 100 index during lunchtime trade, standing down 26p, or 7.4%, 326.75p.