Compass and Wolseley cash in on Yankee dollar

The US is still the sweet spot for world's biggest caterer Compass. And building business Wolseley is also stacking up profits in the territory.

by Rebecca Burn-Callander
Last Updated: 19 Aug 2013
Compass, which serves up four billion meals a year to office workers, soldiers and school children in 50 countries, reckons that revenues for the six months to March 2012 will grow 8.5%.

Not the most smoking rate of expansion, MT admits. But Compass has been hit by the downturn in the UK and Europe. French catering rival Sodexo has also heaped the pressure on by aggressively pursing its profit and turnover goals for the period (it scored a neat deal with the Rugby World Cup in the first quarter).  Still, things could be worse. At least the summer holds a few lucrative opportunities for Compass: catering for Wimbledon being the main money-spinner.

Across the pond, however, Compass’ fortunes are looking up. The US accounts for around 40% of group revenue and a strong six months in the territory – as well as the emerging markets – has helped keep Compass on course.

‘Whilst the current economic uncertainty is likely to continue to put pressure on like-for-like volume in some regions,’ reads a statement from the group, ‘we remain positive about the opportunities to grow the business.’ Positivity is great, but with the US and UK reducing their spend on the military – meals and all - it’s going to have to find some decent new revenue streams to make up the shortfall.

Building and heating supplies firm Wolseley is also doing a roaring trade in the US. Quite the turnaround from its horrific showing over there (post housing crash) in 2009. The company today reported pre-tax profits of £250m for the six months to the end of January, up from £195m in the same period the previous year. Its US plumbing business Ferguson has been main agent of Wolseley’s success. Like-for-like sales in the UK, through the firm’s Plumb Centre and Bathstore chains, are down 3%.

‘Growth trends for the group since the end of the period have been slightly lower than the first half overall, with the US a little better and Europe a little weaker,’ explained Wolseley chief executive Ian Meakins. Nevertheless, Wolseley is confident enough to raise its interim dividend 33% to 20 pence per share.

It seems that the US economy is showing real buoyancy on the world stage once more. And, despite the financial turbulence in other markets, some companies are still managing to live the American dream…

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