Catering group Compass sees lockdown eat into profits
C a t e r i n g g i a n t C o m p a s s – whose clients include Edinburgh Zoo – has warned over further action to overhaul the business after the pandemic sent annual profits plummeting by 76 per cent.
T h e g r o u p' s p r e - t a x p r o fits slumped to £427 million for the year to September 30 from £1.7 billion as the crisis devastated the global hospitality industry and affected its school and workplace canteen services.
C o mp a s s s a i d i t r e t u r n e d t h e b u s i n e s s t o p r o f i t i n i t s final quarter after renegotiating contracts, cost control and seeing some improvement in trading. But it said it would continue to overhaul its operations, with ongoing "resizing" actions to weather the coronavirus crisis.
It has already slashed annual labour costs by around £280m at sites such as offices, factories and spor ts venues, with another £70m trimmed from its head office operations.
It did not reveal how many roles have been axed, though t h e g r o u p e mp l o ys a l a rg e nu mb er of ca sua l st a ff and said it was able to l imit job losses through government support schemes.
C o m p a s s h a s m o r e t h a n 40,000 staff in the UK out of a global workforce of around 600,000 across 45 countries. I t s l a rg e s t ma r ke t i s No r t h America.
C h i e f e x e c u t i v e D o m i n i c B l a ke mor e s a id : "2 0 2 0 was a challenging year for Compass."
H e a d d e d :
"A l t h o u g h
t h e p r o s p e c t s o f a v a c c i n e a r e encouraging, the resumption of lockdowns in some of our major markets shows that we have to continue to take proactive actions to control the controllable and ensure the busin e s s c a n t h r ive d e s p i t e t h e ongoing pandemic."
Compass raised £2bn in new capital in May to boost its balance sheet, which came on top of effor ts launched in April to slash its overall cost base by £500m a month, including axing its interim and final shareholder dividend payouts and cutting executive salaries.
Analyst Anna Barnfather at Liberum said the focus was now "on the outlook" for Comp a s s . "Whi l e ex i s t i n g b u s i - n e s s r e m a i n s d e p r e s s e d , i t is encouraged by the strong pip eline of new business in other areas." she added.