EU slow­down wipes £2.5bn off Com­pass

Scottish Daily Mail - - City & Finance - by Francesca Washtell

AROUND £2.5bn was wiped off Com­pass Group’s value yes­ter­day after it warned it will cut jobs amid tougher trad­ing in europe.

The cater­ing group said there was less de­mand for its staff in of­fice can­teens be­cause busi­nesses in europe have been re­duc­ing their work­forces.

Com­pass, which is the world’s big­gest cater­ing firm, serves 5.5bn meals a year for schools, army bar­racks and em­ploy­ers such as Google, hSBC, Boe­ing and Coca-Cola. It brings in around 40pc of its rev­enue from cater­ing for busi­nesses.

Com­pass has set aside £300m for write­downs in 2019 and 2020. Around half of this will fund a re­struc­tur­ing, which will in­clude a re­dun­dancy plan for up to 0.5pc of its 600,000 em­ploy­ees world­wide – equal to around 3,000 roles.

The other half will be put to­wards loss-mak­ing con­tracts, Com­pass said in its an­nual re­sults.

Sev­eral hun­dred of th­ese job cuts are ex­pected to be in the UK, while oth­ers could go in France, Ger­many, Ja­pan and Brazil.

Com­pass chief ex­ec­u­tive Do­minic Blake­more said there had been ‘pres­sure’ in the part of the busi­ness that serves busi­nesses and in­dus­try in europe, and that there had been ‘some hes­i­ta­tion’ from cus­tomers mak­ing de­ci­sions on con­tracts.

The firm was the big­gest faller on the FTSe 100, sink­ing 7.5pc, or 155.5p, to 1915.5p, wip­ing £2.5bn off its mar­ket value. Group sales rose 6.4pc to £25.2bn – its high­est rate of growth in ten years.

And the com­pany’s sports divi­sion ex­celled, clinch­ing a con­tract ex­ten­sion with Chelsea Foot­ball Club and cater­ing the Wim­ble­don ten­nis cham­pi­onship.

Full-year profit be­fore tax fell 3.5pc to £1.5bn.

Blake­more was up­beat about the firm’s out­look for 2020, but said it ‘re­mains cau­tious’ about fu­ture trad­ing in europe.

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