Compass Group’s underlying operating profit slides 65% in H1
- Compass Group's underlying pre-tax profit slides to £290 million.
- The contract foodservice company expects revenue to pick up in Q3.
- Compass Group wants to slash its carbon footprint by at least 65%.
Compass Group plc (LON: CPG) said on Wednesday that its pre-tax profit fell sharply in the fiscal first half as the Coronavirus pandemic weighed on revenue. The company, however, expressed confidence that revenue will pick up gradually in the third quarter.
Compass Group shares opened 2% up in the stock market on Wednesday but lost the entire intraday gain later on. Including the price action, it is now exchanging hands at £15.21 per share. In comparison, it had started the year 2021 at a much lower £13.71 per share. The price action should come in handy if you are interested in investing in the stock market.
Compass Group reports £8.44 billion of revenue
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Compass Group said its pre-tax profit was capped at £133 million in the six months that concluded on 31st March. In the same period last year, its pre-tax profit had come in at a much higher £787 million. In its prior report published in November, the London-listed firm had noted £210 million of full-year pre-tax profit.
At £290 million, the underlying operating profit in H1 posted a decline of 65%. Margin, the catering group added, stood at 3.4%. Compass Group generated £8.44 billion of revenue in the first half – a decline from £12.48 billion last year. In the fiscal third quarter, the British multinational expects its operating margin to fall in the range of 4.5% to 5.0%.
In separate news from Europe, the world’s largest aeroplane manufacturer, Airbus SE, revived plans for a new single-aisle jet plant in Toulouse.
CEO Dominic Blakemore’s remarks on Wednesday
Commenting on the financial update, CEO Dominic Blakemore said:
“With the gathering pace of vaccination rollouts across our major markets, we are working closely with our clients to prepare to reopen their sites safety, although the picture across the world remains mixed.”
Compass Group reiterated its target of cutting its carbon footprint by at least 65% by the end of this decade. As part of it, throughout its supply chain, 40% of the animal-based foods, it highlighted, will be replaced with alternative proteins. The Chertsey-based company also pledged to reduce food waste by 50%.
Compass Group performed largely downbeat in the stock market last year with an annual decline of more than 30%. At the time of writing, the contract foodservice company has a market capitalisation of £27.22 billion and a price to earnings ratio of 190.22.