(Reuters) – The world’s largest caterer Compass Group
Reporting results a day earlier than expected, the company also said underlying operating profit for the six months to the end of March dropped 10% – or just under 100 million pounds – to 854 million pounds, while revenue grew just 1.6% to 12.6 billion pounds.
Compass, which employs around 600,000 people globally and has already scrapped its dividend and drawn credit from the government’s COVID Corporate Finance Facility, said it has made more cuts that would allow it to save up to 500 million pounds a month. It will also reduce capital spending by 200 million pounds in the second half of the year.
Underlining the impact of a crisis which has seen around half of its businesses shut their doors, it withdrew its 2020 outlook and said organic revenue sank 46% in April.
Initial indications from bookrunners were that there was more than enough interest to place the share issue.
“The COVID-19 pandemic has had a profound impact on Compass,” Chief Executive Officer Dominic Blakemore said in the statement.
“The measures announced today will reduce leverage and allow Compass to invest in organic and inorganic opportunities that will enhance its competitive advantages and support growth in the medium to long term,” the company added.
Plans for an equity raise were initially reported by Bloomberg on Friday.
Analysts in response had said that the capital raise might be taken positively if it were to fund mergers and acquisitions.
($1 = 0.8187 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; editing by Patrick Graham)
