17th Mar 2020 09:12
(Alliance News) - Compass Group PLC on Tuesday said it expects governmental containment measures arising from the Covid-19 crisis to affect its interim earnings.
The contract caterer said majority of its Sports & Leisure and Education business in Europe and North America have been closed due to government restrictions, with its Business & Industry volumes being "severely" hurt.
Compass said revenue growth in its half year to March 31 is now expected to be between zero and 2%, with operating profit expected to be between GBP125 million to GBP225 million lower than previously expected.
For the comparative period a year prior, the FTSE 100 company generated a pretax profit of GBP852 million on revenue of GBP12.5 billion. Operating profit was GBP913 million.
"We are working to protect our cash flow and are pro-actively managing our capital expenditure and working capital. We have significant headroom against a 4x net debt/earnings before interest, taxes, depreciation, and amortization covenant in our US private placement agreements," Compass said.
"We have substantial liquidity with a GBP2 billion committed revolving credit facility maturing in 2025. Stable outlooks have recently been reconfirmed on our A/A3 credit ratings," the company added.
The stock was trading 23% lower at 868.00 pence each on Tuesday morning in London.
By Ife Taiwo; [email protected]
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