23rd Apr 2020 09:05
(Alliance News) - Contract caterer Compass Group PLC on Thursday ruled out a payout during its current financial year and added that 55% of its activity has been halted due to lockdown measures.
Compass said its trading in the last two weeks of March, the final fortnight of its interim period, was in line with new guidance it issued earlier that month.
Organic revenue growth was roughly 1.6% in the first half, inside its 0% to 2% growth range.
"Currently around 55% of our business is closed due to country lock downs. The impact of government containment measures varies significantly by sector," Compass explained.
In Sports & Leisure, 100% of activity is closed while both Education and Business & Industry have seen 75% of their trading hit. Defence, Offshore & Remote and Healthcare are running at full capacity, however.
Business & Industry is the company's largest revenue contributor at 29%. Healthcare is the next largest at 23%, ahead of Education at 18%, Sports & Leisure at 13% and Defence, Offshore & Remote at 7%.
Compass said: "We are proactively mitigating our cost base by around GBP450 million per month by taking a wide range of actions."
Some employees have been redeployed or furloughed, while the firm's chief executive has taken a 30% salary cut.
"The group board and executive committee have temporarily reduced their fees and salaries by 25%," Compass added.
"Net capital expenditure in half year 2020 was around GBP400 million and we expect capex to be lower in the second half of the year."
Mergers & acquisition activity has been halted and Compass said a dividend for the year to September 30 will not be paid.
Compass said: "We need to balance this with the exceptional circumstances that the Covid-19 pandemic represents.
"The board will keep future dividends under review and will restart payments when it is appropriate to do so."
The company is penned to release its interim report on May 20, a week later than initially planned.
Shares in the company were 1.0% lower at 1,302.50 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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