Compass Group shares (LON:CPG) rose almost 5% on Tuesday morning after the group through September 30 shared full-year results.
After a “challenging” year for the group, the FTSE 100 company returned to profit in the fourth quarter, thanks to easing costs, increasing liquidity and strengthening its balance sheet.
Revenue fell 18.8% from £24.8 billion in 2019, while operating profit fell sharply to 69.7% to £561 million.
The group began the year with a strong performance after the pandemic hit had to close half of its business. In the fourth quarter, the compass was able to return to profitability and is now cash-neutral.
“2020 has been a challenging year for Compass. Dominique Blakemore CEO said:
“We have started this year well to deliver the strongest performance ever. During the two weeks of March, we saw containment measures to stop the expansion of half of our nearby businesses in Covid-19. We have quickly strengthened health and safety protocols, eased costs, increased liquidity and strengthened our balance sheets.
“Until summer, our performance began to slowly improve as it helped our education and business and industry clients return safely to schools and offices. Importantly, in the fourth quarter we returned our business to profitability and are now cash-neutral. This was achieved primarily through contract renegotiation, ongoing discipline in costs, and improved volumes to reflect the challenging trading environment. We are running at PACE and we expect the underlying operating profit margin for the first quarter of 2021 to be around 2.5%.”
Looking forward to it, the group is preparing a challenging trading environment, adapting operations to improve offers, increase flexibility and manage costs.
Compass Group’s stock (LON:CPG) is trading +4.39% at 1.402,50 (0903GMT).
