Compass Group gets narrowed focus under new CEO
Earlier this year, Dominic Blakemore, the new chief executive at the world’s biggest catering firm, Compass Group, got a nasty shock: his predecessor had been killed in a plane accident, and he had to step up to the role early. It was a tragic event that left executives stunned and investors in a mild state of panic. Few people would envy Blakemore’s entrance into the top job but now, months later, he’s finally putting his stamp on the company’s strategy.
Compass Group’s share price rose by 3% in 5 days last week
SOURCE: Yahoo Finance
Blakemore announced in May that Compass Group would be selling or withdrawing from business accounting for 5% of its revenues. This firms the first example of a “sharpening of the strategy” that its new CEO sees as vital to continued success.
He was speaking after his first set of results as CEO, which he described as “good strong results” – albeit with the caveat that some areas of the business weren’t quite as robust as he had previously believed. By “sharpening the strategy” and excising or transforming these areas, Blakemore thinks he can make the company “more consistent and bolder in terms of our food purchasing capabilities.” He also added that Compass Group could become “more productive and efficient” when it came to managing labour, which remains its biggest cost.
For the six months to March’s end, Compass Group reported £11.5 billion in revenue (a 4.8% rise from the comparable period in previous year). It saw operating profits of £875 million (up 4.5% year on year), although this was diminished by a hit from foreign currency fluctuations.
Dominion holds Compass group in its Global Trends Managed Fund.
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