Vending

COVID hammers Compass Group sales, profits for first half 2021

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May 12, 2021

Compass Group Plc, which owns Canteen Services in the U.S., continued to suffer losses in the first six months of the year due to COVID-19, as revenue declined 20.4% from £12.2 billion ($17.19 billion) in first six months of 2020 to £8.6 billion ($12.12 billion) in the six months ending March 31, 2021, according to an earnings release.

Operating profit fell 64.5% from £817 million ($1.115 billion) to £290 million ($408.7 million) while earnings per share dropped 73.3% from 35.9 pounds ($49.19) to 9.6 pounds ($13.53).

North America revenue declined from £8.08 billion ($11.39 billion) to £5.16 billion ($7.27 billion).

For Europe, revenue fell from £3.185 billion ($3.39 billion) to £2.26 billion ($3.19 billion).

For rest of world, revenue rose from £1.350 billion ($1.8 billion) to £1.131 billion ($1.59 billion).

Shares traded at $21.50 today against a 52-week range of $12.90-$22.37.

As expected, COVID continued to negatively affect performance during the first six months of the year, according to the earnings release. Revenue remained at around 71% of 2019 revenues as containment measures were extended over the winter months.

Despite limited volume growth, the company focused on controlling the controllable by continuing to manage its cost base, resize its workforce and evolve and adapt our operations. As a result, the company improved operating margins quarter on quarter and is now more than half way to recovering its pre-COVID margin.

"During the first half of this financial year, by controlling the controllable, we delivered continued margin progression, strong cashflow and excellent client retention," Dominic Blakemore, group chief executive, said in the press release. "This was despite further lockdowns and limited volume recovery. With the gathering pace of vaccination rollouts across our major markets, we are working closely with our clients to prepare to reopen their sites safely, although the picture across the world remains mixed.

"Whilst we expect any revenue recovery to be gradual, we remain confident in our ability to return to a group underlying margin above 7% before we return to pre COVID volumes."

For an update on how the coronavirus pandemic is affecting convenience services, click here.