26th Nov 2019 12:56
(Alliance News) - Catering giant Compass Group PLC on Tuesday said it plans to cut up to 4,000 jobs owing to a deteriorating European outlook and as it warned over Brexit's impact.
"There will be... no more than 4,000 job cuts" over the next two years, or less than 1% of Compass' global workforce, a spokesman told AFP after the company said it would look to cut costs after a drop in annual profit.
"There is some weakness in some key European markets like Germany, France and the UK," the spokesman said.
"Key manufacturing clients are laying off people."
Compass, which supplies contract catering services to offices, schools, hospitals and sports centres, employs 600,000 staff worldwide.
Compass earlier Tuesday said pretax profit fell 3.5% on the year before to GBP1.47 billion due to a cost action programme bringing a GBP190 million one-off charge, offsetting foreign exchange benefits. Revenue rose 8.8% to GBP24.88 billion.
"Despite this good performance, we are not immune to the macro environment," Chief Executive Dominic Blakemore said in the results statement.
"Deteriorating business and consumer confidence in Europe has impacted the group."
"Given these trends, we are taking prompt action in Europe" and elsewhere "to capitalise on future growth opportunities," he added.
Turning to Brexit, Compass warned over the impact of Britain's scheduled departure from the EU at the end of January.
"We have identified a potential impact on our food supply chain in the UK relating to Brexit," it said.
Compass pointed to "potential increased import costs" from a weaker pound, "compounded by potential new import duties and tariffs... staff shortages and salary cost pressures".
It added: "Where possible, we seek to absorb price increases through operational efficiencies."
Tuesday's news sent Compass shares sliding 6.2% to 1,942 pence, topping the fallers' board on London's rising stock market.
"Compass cautioned trading in Europe was soft, which overshadowed the largely positive full-year numbers," said CMC Markets analyst David Madden.
source: AFP
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