North America

North America has had another strong year with organic revenue growth of 7.1%.

We continue to win good quality new business across all sectors. Significant wins include the new US Capitol Visitor Center in Washington, Nortel, Exxon and Inova Health System, one of the largest combined foodservice and support services contracts we have won in Healthcare. In Education, we have won the contract to feed over 27,000 students in St Louis Public Schools and, in the remote site sector, the workers’ camps for the TransCanada Pathfinder Pipeline project. We were also delighted to retain our existing foodservice contract with Pfizer and extend this to include significant new support services business.

The slight acceleration in the rate of organic revenue growth has been driven by increased like for like revenue growth. The integration of the recently acquired Professional Services and Medi-Dyn businesses has helped to drive another good year of growth in both foodservice and support services in the Healthcare sector and, in Education, strong enrolments and an increasing take up have resulted in very good like for like growth. Levy, our Sports & Leisure business, has continued to grow whilst driving excellent efficiencies in both food and unit costs. In Canada, the remote site business performed well and we are making good progress in growing other sectors. By applying a more retail mindset to our business, we have sharpened our approach to pricing and continue to broaden and strengthen our offer. An example of this is the expansion of Outtakes, our ‘grab and go’ solution, providing on-the-go convenience in a flexible format, which has helped deliver 6% organic revenue growth in Business & Industry.

Operating profit increased by £45 million, or 17%, on a constant currency basis to £311 million (2007: £266 million on a constant currency basis). We have delivered a 50 basis points improvement in margin taking the overall margin to 6.8%. We have been very successful in fighting food cost inflation and have delivered good efficiency gains, both in and above unit.

The launch of e-procurement during the year, together with further consolidation of our supplier and product base, has provided greater control over spending and compliance, while menu management and opportunity buys have taken advantage of lower cost seasonal produce. The ‘Trim Trax’ waste reduction programme, which creates visibility and awareness of excess and discarded quantities, has continued to drive good waste reduction practices.

Labour cost continues to be a focus area with the implementation of tools and processes to improve efficiencies in scheduling and to reduce the use of overtime and temporary costs. A key driver of the margin improvement has been targeting purchasing opportunities and operational practices in areas of in-unit overheads such as uniforms and cleaning products, together with the continued leverage of above unit overheads as the business grows.