Catering group Compass has reported that its organic revenue increased by 1.6 per cent in the first half of the year in its half-year results.
It states that its operating margin declined by 80 basis points (bps) (90bps excluding the impact of IFRS 16) and underlying free cash flow was £186 million.
Organic revenue growth was around 6 per cent, with North America up 8.1 per cent, Europe up 0.8 per cent and Rest of World up 5.2 per cent.
Operating profit margin had improved by around 20bps (10bps excluding the impact of IFRS 16), helped by savings from the cost action programme announced in November 2019.
Compass said performance for the six months to the end of March reflects the impact of CovidD-19 on March trading.
Dominic Blakemore, group chief executive, said: “The Covid-19 pandemic has had a profound impact on Compass. We can only exist with the commitment of our colleagues around the world, many of whom have been on the front line of the battle against the pandemic. I am extremely proud of how the organisation has responded, and I’m humbled by the commitment and dedication our people are showing, day in day out. I want to extend my deepest sympathies to the families of those colleagues that have lost their lives to Covid-19.
“Since the beginning of the crisis, keeping our colleagues safe has been our overriding focus. Colleague and consumer safety will continue to guide everything we do as we move towards reopening more units over the months ahead. The first five months covered by the results we are announcing showed a continuation of the strong performance we reported last year, but it goes without saying that Covid-19 has changed everything. Compass is a resilient and adaptable organisation and we have moved quickly to manage cash and costs and increase liquidity. We are doing all we can to protect jobs by redeploying colleagues into units that remain open and using government job retention schemes where available.
“The duration of the pandemic and the pace at which containment measures are relaxed in different countries is unknown, which makes it a challenge to reliably assess the impact across our markets and our business. We are therefore withdrawing our previous growth and margin outlook for 2020. We remain, however, excited about the significant structural market opportunity globally and the potential for further organic revenue growth, margin improvement and returns to shareholders over time. Given the uncertainty in the short-term outlook, today we have launched a £2 billion equity raise to reduce leverage and increase our liquidity. A strong balance sheet will allow us to weather the crisis whilst continuing to invest in the business to enhance our competitive advantages, support our long-term growth prospects and further consolidate our position as the industry leader in food services. ”