North America

Our North American business has delivered another very strong performance

Our North American business (which includes our operations in the USA, Canada and Mexico) has delivered another very strong performance. Revenues were £3,094 million (2009: £3,082 million), with organic growth of 2.8%. Operating profit increased by £18 million on a constant currency basis, or 8.0%, to £244 million (2009: £226 million on a constant currency basis). The efficiencies which we generated last year, particularly in the procurement and logistics area, have flowed through to the first half of this year, contributing to a margin improvement of 30 basis points.

The Business & Industry sector has delivered very good levels of new business, including contracts with Wells Fargo, Visa, Citizens Bank and Pfizer Conference Solutions. The like for like pressure on volumes that was evident last year has continued into the first half. However, headcounts at our client sites have started to level off and the sharp reductions in event catering and corporate hospitality have stabilised. Further efficiency measures have been introduced which have helped deliver both profit and margin improvement.

Following the recent acquisitions we have made in Healthcare, our strengthened support services offer has improved our ability to cross-sell between food and support services, contributing to the delivery of good organic revenue growth. We continue to see excellent retention rates and to win good quality new business in both food and support services. For example, recent wins include the Staten Island University Hospital, one of the largest teaching hospitals in New York City, the Kaiser Foundation Hospitals in California and the Miami Jewish Health System, where, as part of our services, we will be providing senior dining.

The Education sector is benefiting from strong new contract wins during the summer last year which are now flowing through to the current year performance. Retention remains excellent and the like for like revenues are encouraging given the continued high level of student enrolments and uptake of board plans.

In Levy, our Sports & Leisure business, we have seen an increase in new business wins and we continue to see a strong pipeline, although like for like volumes remain soft with consumer confidence slow to return. New contract wins include the 2010 US Golf Open Championship at Pebble Beach in California, the concessions business of the Philips Arena (home of the NBA’s Atlanta Hawks and the NHL’s Atlanta Thrashers), where we already operate the premium food services and the Arco Arena (home of the Sacramento Kings NBA team). Ongoing efficiency measures are delivering further margin improvement.

In Canada, as well as the recently announced acquisition of Hurley Corporation, we have won a contract to provide food and support services to Black Diamond, an ESS remote site client and in Toronto we have been appointed to provide conference services to The Estates at Sunnybrook.