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Compass Group cautious on emerging markets; revenue growth still expected overall

Compass Group cautious on emerging markets; revenue growth still expected overall

Catering firm Compass Group (LON:CPG) has warned that lower commodity prices are impacting its overseas business, although full-year revenue expectations remain positive. 

In a half-year trading update, the business forecast revenue growth of 5.5% for the six months to 31 March 2015, with good levels of new business and high retention rates.

The business will release the full-numbers in May, but expects organic revenue growth in Europe to be around 0.5% ahead; while North America is expected to see revenue growth of 8%.

Meanwhile, Compass also said its Japan business has returned to growth and that that new business wins in emerging markets are expected.

However, it warned that the economic environment "in some emerging markets is uncertain”, and lower commodity prices are impacting its offshore and remote business.

“Due to the weakness in like for like volumes in some emerging markets and pressures in our offshore and remote business, we expect the operating margin to decline by around 10 basis points,” it said.

Shares were up 0.5% in early deals to 1,181p. 

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