Demand in developing economies see Compass Group perform well

As catering giant Compass Group reports a good performance for Q4, Graham Spooner, investment adviser at The Share Centre, explains what this means for investors.

"Compass Group reported positive progress for Q4 and expects full year sales to grow by 9% - boosted by strong levels of new business. Growth seeking investors will be pleased to hear emerging markets continue to be the group's growth engine in the medium term.

"Economic pressures have seen volumes suffer, which has impacted like-for-like sales, and this strain is likely to continue. However, these lower volume levels have been offset by the sales growth in the first half of the year and the company is trading in line with expectations.

"Despite the impact of the earthquake in Japan earlier this year, the group has reported the profit margin for the year is expected to remain at the same level as the year before.

"Compass Group's performance in a difficult economy has reassured investors. The group has an element of defensive qualities, and with the share price suffering recently we would recommend investors ‘buy' for the longer term. The group's diversity and good management are attractive for lower risk investors."