Compass Group , the world's biggest caterer, posted a rise in full year profit and was upbeat on its prospects after growth in North America and emerging markets helped offset tough economic conditions in Europe and the earthquake in Japan.

The group, which provides meals for office workers, members of the armed forces and schoolchildren across the world, made an underlying operating profit of 1.09 billion pounds, up 9 percent and in line with the average forecast, according to a company-supplied poll of 12 analysts.

Compass said north America, which accounts for nearly 7 billion pounds of the group's 15.8 billion total revenue, remained its biggest growth engine with operating profit up 9.6 percent.

The U.S. culture is open to outsourcing and the current economic climate is resulting in some increased activity. We have an excellent pipeline of new business, high retention rates and ongoing opportunities to drive efficiencies, it said in a statement on Thursday.

Compass was also positive on the outlook for the company, and its possibilities for expansion.

The group continues to make excellent progress, despite the headwinds of food cost inflation, an uncertain economic backdrop in parts of the world and the impact of events in Japan, chairman Roy Gardner said in a statement.

The strength of our cash flows enables us to increases investment in the business to drive organic growth, as well as investing in high-quality infill acquisitions.

NEW OPPORTUNITIES

Compass, which also provides catering services at major sporting events and entertainment venues such as the O2 Arena and Stamford Bridge in London, saw opportunities for further outsourcing in its core catering market, while support services offered new opportunities for growth.

We are also placing greater emphasis on the fast growing and emerging markets, where we see real opportunity for further expansion, Cousins said.

French catering-to-vouchers group Sodexo said in November emerging markets and a recent acquisition in Brazil should underpin earnings growth in 2011-12 and it was ready to cut costs in response to depressed developed economies.

Compass announced the appointment of Dominic Blakemore as finance director and Gary Green and Andy Martin as chief operating officers. It is initiating a new management structure with Green having responsible for North America, Martin focussing on Europe & Japan and Cousins focussing more on emerging markets.

Shares in Compass, which have outperformed the FTSE 100 <.FTSE> by 10 percent since the start of the year, were up 0.9 percent to 565 pence by 0835 GMT.

Compass said it took a 15 million pound hit in the year from the impact of the Japanese earthquake in March and had 15 million pounds of restructuring costs relating to acquisitions.

Including Japan, restructuring and other exceptional costs, operating profit was up 2.7 percent to 1.02 billion.

Total revenue increased by almost 10 percent, including organic growth of over 5 percent. Operating margin stayed unchanged at 6.9 percent but would have improved by 20 basis points excluding the impact of Japan and restructuring.

Compass increased its full year dividend by 10 percent to 19.3 pence and said it would return 500 million pounds to shareholders through share buybacks over the next twelve months.

(Reporting by Matt Scuffham; Editing by Kate Holton and Jodie Ginsberg)