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Caterer Compass reports Q3 margins at top end of forecast

By Reuters

-Caterer Compass Group said on Thursday it expects trading to be around 80% to 85% of pre-pandemic levels in the fourth quarter, betting on university campuses reopening in the fall, after reporting margins at the top end of its forecast.

The company, which serves university students, office workers and seniors in old age homes across 45 countries, reported organic revenue growth of 36.4% and margins of 5% for the three months ended June.

Operating margins in the current quarter are expected to rise to between 5.5% and 6% from the third quarter, the British company said.

The world’s largest catering firm reiterated its confidence to return to 7% margins, even before the number of meals it serves returns to pre-crisis levels, as it cuts costs.

Companies in the food services sector, including France’s Sodexo, Elior Group and U.S.-based Aramark, that were hit by the coronavirus lockdowns are gradually recovering as economies reopen.

In the United States, its largest market where reopening has been much faster, Compass said revenue was boosted by higher attendance for sports and other leisure events.