North America

We have continued to see good organic growth of 4.4% in North America.

Despite the economic challenges, our North American business has made very good progress in the first half with organic revenue growth of 4.4%. Operating profit increased by £29 million, or 14%, on a constant currency basis to £234 million (2008: £205 million on a constant currency basis). The margin improvement seen in 2008 has continued throughout the first half, with a 50 basis points improvement on a constant currency basis. Including the £2 million benefit of the one-off profit on the prior year disposal of a minority stake in Au Bon Pain, the margin was 7.6%.

We have once again seen excellent levels of new business and retention across all the key sectors. In addition, North America has made excellent progress in driving efficiencies, in particular through the purchasing process and on reducing overheads.

The Business & Industry sector has had another record half year of new business, including new contracts such as the World Bank Group, where we feed 10,000 staff representing over 160 countries. Retention has continued to be very strong. The softness we have seen in like for like volumes in parts of the Business & Industry sector has mainly been driven by a reduction in event catering and hospitality spend. Whilst there is some downward pressure from fewer employees on site, consumers have sought to take advantage of our ‘grab & go’ and ‘value’ offers and loyalty plans. Fast and decisive action on cost has enabled the Business & Industry business to deliver another half year of profit and margin growth.

The momentum behind our Healthcare food and support services business has once again delivered very strong organic revenue growth.

We are seeing very good like for like volume growth in Education, driven by increasing enrolments and take up of board plans. Together with the flow through from record new business wins last year, we have again delivered double digit organic revenue growth. We have recently won contracts with Indian Prairie School District in Illinois and Queens University of Charlotte, adding to the over 530 million meals we serve each year in schools, colleges and universities in North America.

Like for like volumes in the Sports & Leisure sector are being impacted by a reduction in corporate hospitality spend, however our ability to flex costs and drive efficiencies has enabled us to improve margins and we continue to see a strong pipeline for new business opportunities.