LONDON -- Compass Group reported higher profit for its first half, boosted in large part by strong revenue growth in North America. The company stood by its full-year outlook, despite taking an $8 million year-to-date hit as a result of the impact of the tragic events in Japan and projecting further losses in the second half.
Year-to-date profit rose 15% to $857 million from $740 million last year. In the first half, revenue increased 10.8% to $12.7 billion from $11.4 billion in the year-ago period.
Revenues from Compass Group's North American business rose 12.8% year over year, reflecting both new business and same-store sales growth. In Continental Europe, where economic conditions in some countries remain challenging, growth was only 1.6%. Revenues in the United Kingdom and Ireland rose 8.9%. In the rest of the world, revenue grew 20.6%, with strong results mainly in India and Australia.
Compass said the earthquake and tsunami in Japan have disrupted many of the manufacturing sites it serves, and its client base in offices has been reduced by 10% to 15%. The company anticipates that the aftermath of the disasters will reduce second-half profit by around $32.2 million, but said it will still meet its full-year profit forecast.
"Compass has had a good start to the year, delivering both strong organic revenue growth and a further improvement in the margin," said Compass chief executive Richard Cousins. "As we look out to the second half, we are encouraged by the pipeline of new business and the ongoing opportunities we have to generate further efficiencies."
Canteen Vending Services is the oldest and largest franchise of Compass Group's North America division. Eighty-year-old Canteen became a part of Compass in the 1990s.