(Reuters) - Compass said on Wednesday it cannot predict how quickly its revenue will recover from the coronavirus crisis as the catering giant forecast a 19% organic sales fall and a 100 million pound ($128 million) hit on its biggest businesses.
Shares in Compass CPG.L, whose cafeterias and catering operations serve workers at Google, Shell and HSBC, as well as schools, old age homes and the armed forces, have slumped 40% this year and were down 4.5% at 0930 GMT after the FTSE 100 firm reported a 36% preliminary fall in fourth-quarter revenue.
“The pace at which our revenues and margins will recover remains unclear, especially given the possible increase in lockdown measures in the Northern Hemisphere through the winter months,” Compass said in a statement.
Compass said the costs of adjusting to the impact of the coronavirus pandemic, which included layoffs, furloughing staff and reduced working hours, hit 90 million pounds ($115 million) in the fourth-quarter, from 42 million pounds in the third.
The company’s chief executive Dominic Blakemore told Reuters in May that Compass may end up being a slightly smaller business as longer periods of physical distancing threatened to reduce the number of customers it serves.
Compass, which made nearly 90% of its first-half revenue in North America and Europe, said at the peak of coronavirus lockdowns in May more than half its operations were closed.
However, it said organic revenue was down 36% year-on-year in the fourth quarter, compared to 44% in the third, signalling an improvement as businesses and schools start reopening.
Analysts on average expect operating profit at Compass for the year ending Sept. 30 to fall by nearly 70% to 597 million pounds, Refinitiv Eikon data shows. Compass reported operating profit of 1.89 billion pounds for 2019.
($1 = 0.7797 pounds)
Reporting by Yadarisa Shabong in Bengaluru; Editing by Shounak Dasgupta, Patrick Graham and Alexander Smith
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