StockMarketWire.com - Food services group Compass reported a fall in profit despite delivering better-than-expected organic growth as acquisition costs and weaker performance in Europe weighed.

For the full year ended 30 September 2019, pre-tax profit fell 3.5% to £1.47bn on-year, even as revenue increased 8.8% to £24.9bn.

Full-year organic growth across the company's regions rose 6.4%, above the its targeted range of 4% to 6%.

The results were also weighed down by weaker volume growth in its business and industry division amid deteriorating business and consumer confidence in Europe.

Compass said it continued to wait for EU regulatory approval for its acquisition of Nordic firm Fazer Foods for €475m.

Looking ahead, the company said it remained cautious on Europe, but was more positive on growth in its North America and its rest of world markets.

'We expect organic growth to be around the mid-point of our 4 to 6% range whilst maintaining our strong margin1 as we mitigate the expected volume pressures through our cost actions,' Compass said.

'Against the backdrop of a deteriorating macro environment in Europe we are taking prompt action to adjust our cost base. These actions, which have also been extended to certain rest of world markets, result in non-underlying cash charges of around £160m over 2019 and 2020, and a non-cash charge of £140m', it added.

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