13OB Anz Nz 21a

RNS Number:5944R
Granada Compass PLC
27 September 2000

                                       
                              GRANADA COMPASS PLC
                   PROGRESS REPORT ON HOSPITALITY BUSINESSES
                                       
Introduction

The merger of Granada Group plc and Compass Group PLC was effected on 27th
July 2000.  The management of the hospitality businesses is today providing
further information on the integration of the Granada Hospitality business
with that of Compass Group.  In addition, it is providing information on
current trading ahead of the close period leading up to the announcement of
results for the year ending 30th September 2000.

The integration is progressing well and we are on schedule to achieve the #70m
synergies we anticipated at the time of the merger announcement.  Moreover, we
are pleased to report that we have successfully merged the two UK management
teams of Sutcliffe and Compass without any disruption to client relationships.

The Company anticipates that the trading results for the year for the
hospitality businesses will be in line with management's expectations.

Compass

Compass' three geographic regions of the UK, Continental Europe and the Rest
of the World, and North America have continued to grow their like for like
sales in the second half of the year in line with the 8% achieved in the first
half.  Further progress has continued to be made in margin improvement.

We have been very pleased at the strong new business performances in each
division which in the UK has included the contract wins of Excel (the new
Docklands exhibition centre),Orange, Sun Microsystems and Dell Computers.  In
Continental Europe and the Rest of the World, good progress has been made
across all sectors with wins including IBM's European headquarters in Germany,
Sydney International Airport, and four important hospitals in France.

We also announce today the acquisition in the US of an initial 49% stake in
Levy Restaurants, an important operator in the large sports and arena
foodservice sector, for #53 million, with an option to buy a further 2% within
two years.  Levy operates in many of the US' most high profile sports arenas
and convention centres including the home arenas of major baseball, basketball
and football teams. It has total contract revenues of $200 million per annum.

New business wins in North America include the foodservice contracts for
Chicago Public Schools, Nexcom and United Technologies Corporation.  In total,
some $300 million of annual revenue from net new business has been won in the
year.

Granada Restaurants

Granada Restaurants which comprises its Sutcliffe foodservice and roadside
divisions is expected to report full year sales growth broadly in line with
first half growth.

Travelodge in particular has continued its successful programme of new
openings, increasing its estate by approximately 1500 rooms.  In addition, it
has achieved increased occupancy rates.

Amongst contracts gained in the year were those for Liverpool FC, Stansted
Airport and Eurostar JV.

Hotels

The Company announced on 19 September 2000 that it has been conducting a
strategic review of its hotel division.  Since the merger, Granada Compass has
received approaches from a number of parties regarding the potential
acquisition of some or all of its hotel portfolio.  In response to these
approaches and in the light of the strategic review, Granada Compass is
currently undertaking exploratory discussions which may or may not lead to the
sale of all or part of the hotel portfolio.  These discussions are at an early
stage and no announcement is expected in the short term.

We are pleased to report strong summer trading and the win of 18 Le Meridien
hotel management contracts in the year with 18 more in the pipeline.

Growth in revenue per available room for the first half of the year was +8%
for Le Meridien, +3% for Posthouse and +4% for Heritage.  Growth in revenue
per available room for the first five months of the second half of the year to
30th September 2000 is ahead of these first half results.

Preliminary Results and Demerger Timetable

Granada Compass plc will announce its preliminary results on 13th December
2000.  Documentation relating to the demerger of the hospitality businesses is
expected to be posted towards the end of the calendar year.

Outlook

We remain committed to branding, internationalisation and market segmentation
with a focus on organic growth, margin improvement and return on capital
employed.

We believe that the success of the actions already taken and the huge
opportunities
offered by this merger will enable us to achieve even greater successes in our
dynamic and growing markets.


Enquiries:

Telephone on Wednesday 27th September:
Francis Mackay      Chairman                Compass Group        020 7796 4133
Michael J Bailey    Chief Executive         Compass Group        020 7796 4133
Andrew Lynch        Group Finance Director  Compass Group        020 7796 4133

Thereafter:
Francis Mackay      Chairman                Compass Group        01932 573000
Michael J Bailey    Chief Executive         Compass Group        01932 573000
Andrew Lynch        Group Finance Director  Compass Group        01932 573000
Nick Lyon                                   Hudson Sandler       020 7796 4133

Website
www.compass-group.com

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