Shares in contract catering company Compass Group rose more than 5% on Thursday after a strong start to its financial year was rewarded with upgrades to its growth forecasts.
The company, which provides catering services to public bodies such as the NHS and to popular tourist locations, said revenues in its first three months to 31 December rose by 5.9%, thanks to new business wins and strong like-for-like revenues.
Rising cost pressures
Compass added that it was taking action to mitigate the effects of rising cost pressures in the UK and this would be reflected in its operating margin in the second half of the year.
Rising food price inflation has been noted by consumer and retail groups in the past few months.
The company said its outlook for 2018 was positive and that it now expected organic growth to be at least in the middle of its target range of 4%-6% for the full-year.
"We continue to focus on driving efficiencies throughout the business and expect modest margin progression on a full year basis, albeit second half weighted," the company said in its trading statement.