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Compass FY20 Profit Declines; Plans To Rebuild Underlying Margin Above 7%

Food and support services company Compass Group Plc. (CPG.L,CMPGF.PK) reported Tuesday that its fiscal 2020 profit before tax plunged 85.9 percent to 210 million pounds from 1.49 billion pounds last year. Earnings per share were 8 pence, down 88.8 percent from 71.6 pence last year.

Underlying profit before tax was 427 million pounds, compared to 1.77 billion pounds last year. Underlying earnings per share were 18.6 pence, compared to 83.8 pence last year.

Earnings per share on IAS 17 proforma basis was 19.1 pence, compared to 83.8 pence a year ago.

Operating profit fell 81.9 percent from last year to 294 million pounds, as a result of the impact of COVID-19, and the resizing programme to adjust cost base, among others.

Underlying operating margin was 2.9 percent, down 450 basis points from 7.4 percent last year.

Revenue fell 19.8 percent to 19.9 billion pounds from 24.9 billion pounds a year ago, as COVID-19 related restrictions reduced volumes in Business & Industry, Education and Sports & Leisure in all three regions.

Underlying revenue declined 18.8 percent to 20.2 billion pounds.

The company noted that although COVID-19 severely impacted the business from late second quarter, new business wins remained robust, and retention was high.

Looking ahead, the company expects first quarter of fiscal 2021 margin to be around 2.5 percent. The company is committed to rebuilding the Group underlying margin to above 7 percent before it returns to pre COVID-19 volumes.

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