Catering giant Compass has warned that its half-year profits could be up to £225m lower than expected due to the coronavirus outbreak.
Compass provides meals for office workers, armed forces and school children in countries across the world.
The group revealed that its organic revenue for the first five months of its first-half period ending 29 February was up 6% as measures to contain the virus in its Asia Pacific region did not materially impact the business. However, Compass stated that the recent acceleration of containment measures adopted by governments and its clients in Europe and North America had affected expectations with volumes being “severely” impacted.
Its trading update said: “We are implementing significant mitigation plans to manage our costs, and at this stage expect the drop-through impact of the lost revenue to be between 25%-30% across the business. As a result, our operating profit for half year 2020 will be £125 million – £225 million lower than expected.”
It reported an underlying profit of £951m in the same period a year ago.
Compass said it was working to protect its cash flow and pro-actively manage capital expenditure and working capital. It stressed that it still had significant headroom and liquidity in its current credit facilities.
