Compass Share Discussion Threads

[i maximus] 28/9/2005 08:57

bad luck guys and girls, said it would tank. apparently merrill have slashed 2006 EPS by 18%

[little beaker] 28/9/2005 08:20

Lol, never trust a group with too many "Sirs" on the board of directors.

[danny murphy] 28/9/2005 07:27

The trading statement all seems positive to me. Lets hope that the market likes it by pushing the price over the 240p barrier!!!

[grupo guitarlumber] 28/9/2005 07:09

Trading Update

RNS Number:8522R
Compass Group PLC
28 September 2005


Trading & Business Review Update, Sale of Travel Concessions

28 September 2005

Prior to the close period and ahead of the announcement of its preliminary
results for the year to 30 September 2005 on 29 November 2005, the Group today
issues the following trading update. Following the business review initiated
earlier this year, the Group also announces the intention to sell its UK and
Continental European travel concessions operations ("SSP").

HIGHLIGHTS

* Trading:
- On track for around #350 million free cash flow (at 2004 exchange rates)
- Turnover growth (on a like-for-like basis) and operating profit (before
goodwill and exceptional items) expected to be around 6% and #710 million
respectively
- Earnings Per Share (before goodwill and exceptional items) expected to
be around 19.0 pence
- Strong trading in North America and Rest of the World regions
- Continental Europe in line with expectations
- Actions in place to improve performance in the UK
* Key decisions arising from the business review:
- Focus on core contract catering operations and continue to build on
growth in the support services business
- Sell the UK and Continental European travel concessions operations
- Simplified management structure (8 divisions to 4)
- New UK management team
- Accelerated overhead savings, on track for #50 million in 2006

TRADING

Group

Trading across the Group in the second half has continued the trends seen in the
first half and has been strong in North America and the Rest of the World
regions, particularly Australasia and Japan. Continental Europe has traded in
line with expectations. In the UK trading has remained subdued and management
has in place actions to improve performance.

Full year operating profit (before goodwill and exceptional items) is expected
to be approximately #710 million.

UK

In the contract business, like-for-like turnover growth is expected to be around
5% and the operating profit margin is expected to be around 6%. As indicated in
May, and in common with many other consumer-facing businesses, the challenge has
been to pass on all the labour and food cost increases incurred by the business.
This is particularly the case in the Business & Industry sector. Margin has also
been impacted by a number of strategic initiatives, including:

* Focus on winning and retaining contracts with a lower level of capital
investment
* Programme of action to create a more robust and sustainable contract
base
* Acceleration of the UK reorganisation by the new management team, with
an #8 million cost in 2005 against operating profit

In concessions, like-for-like turnover growth is also expected to be around 5%
and the operating profit margin is expected to be around 10%. We have seen a
good performance in the air business in particular, but with similar pressures
in terms of labour and food costs as in the contracts business. In the second
half, profits have been impacted by the London bombings (#6-8 million) and the
disposal of the Gatwick Meridien hotel (#4 million).

Overall, like-for-like turnover growth in the UK is expected to be around 5%
with full-year operating profit of approximately #200 million (excluding fuel).
Properly executed, the actions we are taking should enable us to deliver a
similar level of profit and margin in 2006 as for 2005, before adjusting for the
impact of the sale of SSP. Thereafter, as a result of actions taken, we expect
the UK to return to profit growth, on a sustainable basis.

Continental Europe & Rest of the World

Full year like-for-like turnover growth is expected to be around 3% with a good
performance in Rest of the World driven by strong new business wins in Japan and
Australasia, partly off-set by more challenging conditions in France, Germany,
Holland and Italy. Excluding turnover from our military operations in the Middle
East, like-for-like turnover growth is expected to be around 5%.

Operating profit margins for Continental Europe and Rest of the World should be
broadly in line with last year.

As communicated in March, the Group is seeing a decline in the scale of its
military business in the Middle East with turnover expected to fall from around
#250 million in 2004 to around #170 million in 2005, and operating profit
(before exceptional items) in 2005 expected to be around #35 million. There are
still opportunities for military business in the Middle East but increasingly
the Group is choosing not to participate in this work because the margin is
becoming less attractive relative to the complexity of the operations and the
associated risk. We therefore expect to significantly scale back these
operations in the Middle East and for operating profits in 2006 to reduce to no
more than #5 million. In the light of this reduction in activity, we estimate
asset write-downs of around #40 million will be required and these will be
reported as an exceptional item.

Excluding the military operations in the Middle East (referred to above), early
indications suggest that we will see similar trends in 2006 as seen in 2005.

North America

As indicated in May, like-for-like turnover growth is expected to be
approximately 11% for the full year with strong performances across all sectors.
In Healthcare, Morrison's and Crothall's like-for-like turnover growth will be
around 15% ahead of last year. This strong growth reflects our ability to offer
bundled catering and support services. Sports & Leisure will also see
like-for-like turnover growth of around 15%. Full year margins are expected to
be broadly in line with last year.

Looking forward, early indicators for 2006 are encouraging.

Profit Before Tax

Group profit before tax (before goodwill and exceptional items) for the full
year is expected to be approximately #580 million.

Tax

For the full year, tax on profit on ordinary activities (before goodwill and
exceptional items) is expected to be 23% - 24%.

Free Cash Flow

Free Cash Flow for the full year is expected to be in line with our previous
guidance at around #350 million at 2004 exchange rates.

Earnings Per Share

For the full year, basic earnings per share (before goodwill and exceptional
items) are expected to be approximately 19.0 pence.

Business Review Update

The Group today announces its decision to:

* Focus on its core contract catering operations and continue to
build on the growth in support services in order to maximise shareholder value
* Sell the UK and Continental European travel concessions operations ("SSP")
* Reorganise and simplify the Group's management structure, rationalising the
number of operating divisions from 8 to 4, namely: UK, Middle East & Africa;
Americas; Continental Europe; and Rest of the World
* The programme of overhead savings announced in May has been accelerated with
the full #50 million target being achieved in 2006

In July, Peter Harris was appointed CEO of the newly merged UK, Middle East &
Africa division. Under his leadership, the new management team has put in place
a programme of action to create a more robust and sustainable contract base.

On 15 September, the Group announced that Sir Roy Gardner, CEO of Centrica Plc,
will be joining the Board as Senior Independent Director on 1 October 2005 and
that he would succeed Sir Francis Mackay as Chairman during 2006.

Sale of SSP

SSP represents one of the market leaders in travel concessions. It has market
leading positions in many of the 25 countries in which it operates and provides
catering for roadside, railway and airport concessions, principally in the UK
and Continental Europe. In the year ended 30 September 2005, SSP's revenues
(including fuel) are expected to be approximately #1.9 billion (#1.4 billion
excluding fuel), EBITDA (including fuel) of approximately #160 million, and EBIT
(including fuel) of approximately #115 million. We will retain a small part of
the Concessions business, mainly in Japan, Portugal and the US where the
operations are very closely integrated with the rest of the business.

Whilst the travel concessions market offers considerable further growth
opportunities, the sale of SSP will allow management to focus solely on the
Group's core contract catering operations and the growth of its support services
business. The Board believes that in the longer term this focus will improve the
Group's financial performance and drive greater value for shareholders.

The Group expects to launch a formal sale process for SSP before the end of the
calendar year and is being advised by Citigroup. The Group will retain exclusive
use of the SSP brand portfolio in its core contract catering markets (as it has
in other business disposals such as Little Chef and Au Bon Pain) and will seek
to ensure that it retains economies of scale through a purchasing supply
contract with SSP. Proceeds from the sale will be used principally to reduce
debt and strengthen the Group's balance sheet position, with the balance being
returned to shareholders.

This sale should deliver a one-time step up in Return on Capital Employed (ROCE)
of around 30 basis points, which is in addition to our three-year target of a
100 basis point improvement in ROCE between 2006 and 2008. As a consequence of
the sale, the Group's free cash flow target will be revised to #800-850 million,
subject to final terms and use of proceeds.

Andrew Lynch, CEO of SSP, will step down from the Compass Group PLC board as of
today, after nine years, to focus fully on the management of the SSP business.

Michael J. Bailey, Chief Executive, said:

"The business review has led us to make significant decisions which, I believe,
will improve financial performance and deliver value for shareholders.
Simplifying our structure, focusing on contract catering and building our
support services business will enable us to maximise the opportunities which our
global platform and scale give us.

I am pleased with how our businesses in North America and Rest of the World
regions are performing. In the UK, actions are underway to improve financial
performance and I believe this will result in a turnaround over the next 24
months.

For the Group as a whole, quality of service and entrepreneurial spirit remain
key to our success. This, coupled with the increased financial rigour we have
introduced, will deliver strong free cash flow generation and improving returns
on capital employed over the medium term."

Notes

Compass Group PLC is the world's leading foodservice company providing food,
vending and related services to clients and customers in the workplace, at
school and colleges, hospitals, on the move, at leisure and in defence, offshore
and remote locations. Compass Group has annual revenues of #12 billion and
employs 400,000 people in over 90 countries.

SSP operates at over 400 sites at airports, railway stations and motorway
service areas principally in the UK and Continental Europe. It has operations in
some 25 countries, the most material being the UK, France, Spain, Germany and
the Nordic region. It operates more than 1,400 separate units, including outlets
with Compass brands (e.g. Ritazza, Upper Crust, Harry Ramsdens, Millie's
Cookies, Moto, WhistleStop) and franchised brands (e.g. M&S Simply Food, Burger
King).

Today, the Group sets out a number of recent contract wins in Appendix 1.

The financial statements for the year ending 30 September 2005 will be reported
in accordance with United Kingdom generally accepted accounting principles ("UK
GAAP"). Those for the year ended 30 September 2006 will be reported in
accordance with International Financial Reporting Standards ("IFRS") issued by
the International Accounting Standards Board ("IASB"). Comparative information
for the year ended 30 September 2005 will be reissued on an IFRS basis, with
appropriate reconciliations to the previously reported UK GAAP position and
results, in the first quarter of 2006.

Presentation / Webcast
A presentation for analysts and investors will take place at 9:30 am on 28
September 2005 at the Lincoln Centre, 18 Lincoln's Inn Fields, London WC2A 3ED.

The live presentation can also be accessed via both a webcast and dial-in
teleconference starting at 9:30 am:

* To listen to the live presentation via teleconference, dial (UK) +44 20
7365 1854.
* To view the presentation slides and/or listen to a live audio webcast of
the presentation, go to www.compass-group.com or www.cantos.com.
* Please note that remote listeners will not be able to ask questions
during the Q&A session.

A replay recording of the presentation will also be available via teleconference
and webcast:

* A teleconference replay of the presentation will be available for five
working days, until x September 2005. To hear the replay, dial (UK) +44 20
7784 1024 or (US) [phone]. The replay passcode is 8449438#.
* A webcast replay of the presentation will be available for six months,
at www.compass-group.com and www.cantos.com.

Enquiries

Compass Group PLC
Investors/Analysts: Sarah Ellis [phone]
Media: Paul Kelly [phone]

Brunswick
Simon Sporborg / Pamela Small [phone]


Appendix 1
Please find below new contract gains announced today.


B&I

* Switzerland - Swisscom awarded Compass Group (Suisse) SA a new five-year
contract with annual turnover of #13.3 million.
* Norway - DnB NOR awarded Eurest a new three-year contract with
annual turnover of #3.4 million.
* France - Sollac Loraine awarded Eurest a new five-year contract with annual
turnover of #1.4 million.

Defence, Offshore & Remote Site

* France - the Army Ministry (Paris) awarded Eurest a new one-year contract with
annual turnover of #2.2 million.
* Russia - Globalstroi-Engineering awarded ESS (Eurest IoCa) a new two-year
contract with annual turnover of #2.6 million.
* Bosnia Herzegovina - EUFOR awarded ESS a new three-year contract with annual
turnover of #4.3 million.
* Argentina - Minera Alumbrera Limited awarded ESS a new three-year contract
with annual sales of #2.0 million.

Healthcare

* France - Association Notre-Dame de Bon Secours (Paris) awarded Medirest a new
three-year contract with annual turnover of #1.2 million.
* USA - Hospital of the University of Pennsylvania (PA) awarded Morrison
Management Specialists in conjunction with Crothall a new five-year contract
with annual revenues #11.5 million.
* Germany - University Hospital Bonn awarded Clinic Catering Service (CCS) a
new ten-year contract with annual turnover of #1.2 million.

Education

* USA - University of West Florida (FL) awarded Chartwells a new eight-year
contract with annual turnover of #1.1 million.
* USA - UNC Asheville (NC) awarded Chartwells a new eight-year contract with
annual turnover of #1.6 million.
* USA - Wentworth Institute of Technology (MA) awarded Chartwells a new
seven-year contract with annual turnover of #2.2 million.

Sports & Leisure

* UK - The New Stadium (Swansea) awarded FMC a new ten-year contract with annual
turnover of #1.5 million.
* Japan - Angel Corporation awarded Seiyo Food Systems a new four-year contract
with annual turnover of #1.2 million.
* Australia - Campus Living (Sydney Univ. Village & RMIT Village) awarded Eurest
a new ten-year contract with annual sales of #1.7 million.

Vending

* Netherlands - Paresto (MOD) awarded Selecta a new five-year contract with
annual turnover of #2.9 million.
* Sweden - SAAB awarded Selecta a new three-year contract with annual turnover
of #0.7 million.

Travel Concessions

* Spain - AENA awarded SSP Spain a new ten-year contract with annual
turnover of #1.5 million at Son Sant Joan Airport (Palma de Mallorca).
* Egypt - Cairo Airport Company awarded Louis Catering / SSP a new ten-year
contract with annual turnover of #1.6 million at Cairo International Airport.




This information is provided by RNS
The company news service from the London Stock Exchange

END
TSTUBVRRVORKUUR

[grupo guitarlumber] 28/9/2005 07:08

Board Update

RNS Number:8523R
Compass Group PLC
28 September 2005

Compass Group PLC
Board Update

28 September 2005

Compass Group PLC announces today that Michael J Bailey has informed the Board
of his intention to step down as its Chief Executive Officer, after 40 years
service in the Catering Industry. He will continue in his current position at
least until Sir Roy Gardner takes on the role of the new Chairman of Compass
Group, some time during 2006.

Michael J Bailey said "In my time at Compass, we have built a truly
international business with scale and market leadership. Whilst in the short
term the Company has been through a challenging period, particularly in the UK,
I am satisfied that we have taken the necessary action and that a platform has
been established from where the Company can move forward again. I remain fully
committed to implementing our plan through this period of turnaround."

Sir Francis Mackay, Chairman of Compass, said "On behalf of the Compass Group
Board of Directors, I would like to thank Mike for his huge contribution over
the last 12 years. The particular success of our US business, which was
established by Mike, is a testament to his enthusiasm, energy and
entrepreneurial skill."

Sir Roy Gardner commented "We are fortunate that Mike will stay on at Compass at
least until I have taken on the role of Chairman next year. Following that, Mike
and I are both committed to ensuring a smooth period of transition."

Enquiries:

Compass Group PLC

Investors/Analysts: Sarah Ellis [phone]
Media: Paul Kelly [phone]

Brunswick Group

Simon Sporborg/Pamela Small [phone]




This information is provided by RNS
The company news service from the London Stock Exchange

END
BOAEAFNXAEASEAE

[i maximus] 27/9/2005 21:36

i dont see why this as positive. there have been rumours over the years that compass would buy autogrill, now its bailing out of assets to it, because it needs to raise cash. will this affect its bargaining power over suppliers? surely old supply negotiations were on the basis of certain volumes. if they start breaking up the group, perhaps suppliers will want to renegotiate. just have a feeling the shares are going to tank tomorrow. best of luck

[bahtat] 27/9/2005 18:23

I Max

From the AFXF today:
"According to Finanza & Mercati, Autogrill is already in talks with Compass
to buy nearly 1.5 bln eur worth of assets."

[i maximus] 27/9/2005 17:43

is this what you are talking about- "according to II Sole, Autogrill is expected to buy Compass' Travel Concessions business for more than €1 billion. "

[bahtat] 27/9/2005 17:21

I Max

1.5B euros according to the statement.

[i maximus] 27/9/2005 16:34

bahtat, i think that was 1bn euros. gulliverr, think any disposal proceeds will go towards paying back debt

[gulliverr] 27/9/2005 16:28

Enough to give us some cash back?

[bahtat] 27/9/2005 16:26

CPG's sale of SSP was estimated to generate £300M, Autogrill are rumoured to already be in talks with CPG for £1B+ of assets.

What else have Compass put on the table?

[gulliverr] 27/9/2005 16:15

Read the broker's note above.

[i maximus] 27/9/2005 16:12

though with disposals, they lose the buying power synergies they have built up, perhaps business caving in ?

[i maximus] 27/9/2005 16:10

rumoured disposal if true would presumably take pressure off, but focus has to be on trading. this management have been dreaming for so long, lets see what they can come up with

[gulliverr] 27/9/2005 16:06

Of course there are leaks. It's human nature. Expect some good news for a change.

[dhb368] 27/9/2005 15:59

I do not see any point in being short from these levels, although I am not brave enough to be long either ;-)

[i maximus] 27/9/2005 15:15

rising ahead of results, has trading news leaked? it stinks if it has

[i maximus] 27/9/2005 14:39

do they get a whisper? why put out a buy a day ahead of trading statement after the recent track record at this company? wouldnt it be funny if there was another profits warning? keep my shorts regardless

[gulliverr] 27/9/2005 14:02

Sure, I'd buy some more...if I didn't have too many already!

[ariane] 27/9/2005 13:47

Compass "buy"

Tuesday, September 27, 2005 8:08:45 AM ET
Dresdner Kleinwort Wasser.

LONDON, September 27 (newratings.com) - Analysts at Dresdner Kleinwort Wasserstein maintain their "buy" rating on Compass Group (XGR.BER). The target price is set to 290p.

In a research note published this morning, the analysts mention that according to II Sole, Autogrill is expected to buy Compass' Travel Concessions business for more than €1 billion. The disposal would enable Compass to make an important structural shift towards lower capital intensity contract catering, the analysts say. Dresdner Kleinwort Wasserstein expects the disposal to boost the company's cash flows.

[brian spaceship2] 23/9/2005 18:47

I sold off my remaining shares in this a few days ago. I have a very bad feeling about the trading statement coming up this Wednesday. With a new man due on board it would not surprise me if there was some kitchen sinking either in this statement or the next one. The SSP sell off is also a major shift (if true) and I cannot believe it would happen unless things were looking very bad on the free cash flow front.

[blackday] 23/9/2005 14:36

next update 28th sep- long term i love compass-market leader-that will help improve margins in lng term. short term depend on 28th sep update which is wed.

[dhb368] 21/9/2005 12:36

Seems so.

I expected this to rebound to 240 before results. Dont anymore.