Compass counts cost of negative publicity

Catering giant Compass took a swipe at the negative publicity about the standard of UK school meals today as it unveiled a 9.9% fall in annual underlying profits.

Compass labelled its UK performance during the year to September 30 as “unsatisfactory” after revealing that like-for-like sales to schools were 1% lower than last year.

Operating profits in the UK were down by a third at £205m (€300m), even though turnover was 6% higher on a like-for-like basis. The UK accounts for roughly a quarter of the £12.7bn (€18.5bn) of revenues generated by Compass worldwide.

Compass said: “Most contract caterers in the education sector have been impacted by declining participation during the year following recent negative publicity regarding the standard of school meals.”

It also counted the cost of the London bombings on its travel concessions business at railway stations in the capital, which includes the Upper Crust sandwich chain and was put up for sale in September.

Trading elsewhere in the world was in line with its hopes, but Compass confirmed that an investigation into how United Nations contracts were awarded was continuing to cast a shadow.

Three staff members, including the chief executive of its UK operations, have already been dismissed after an inquiry led by law firm Freshfields raised “serious concerns”.

“The investigation is ongoing and, as yet, no final conclusions have been reached,” the company said.

Compass is also co-operating with the United Nations and authorities in the United States over the contracting procedures.