Richard Cousins, the new chief executive of Compass, the world’s largest caterer, today unveiled plans to pull out of up to a third of the 90 countries in which it operates and sell its vending machine business Selecta, reckoned by analysts to be worth about £800 million.
Mr Cousins, who took the helm of the troubled group six months ago, also warned that revenue growth would slide next year as he continues his attempts to revive the company’s fortunes.
Selecta, operating in 21 European countries including the UK, and serving 5 million consumers a day, had underlying earnings of £87 million last year on turnover of £476 million.
Mr Cousins also revealed that the troubled UK arm was still being held back by the legacy of celebrity chef Jamie Oliver’s campaign against poor-quality school foods such as Turkey Twizzlers, which Compass used to provide.
Revenues from the UK education business providing school meals fell 4 per cent in the year. This kept UK profits flat overall at £114 million.
Mr Cousins said there were no signs of a UK turnaround. “We expect business to remain challenging in the UK in 2007 particularly in the education sector,” he said.
State secondary schools have been cancelling contracts and pupils have not been opting for the healthier foods it was now providing, he said.
Overall full year profits from continuing operations were up 2.4 per cent to £508 million, on 7 per cent revenue growth, driven by growing sales in the United States.
The company is still being investigated by US and UK authorities over alleged corruption involving its contracts to the United Nations, from which it has now withdrawn.
Mr Cousins cautioned: “Organic growth rates may for a period slow a little before increasing back to trend rates.”