Compass: shares jump as results reassure
(CercleFinance.com) - Compass shares jumped by almost 5% on Tuesday, as the British catering group said it returned business to profitability in the fiscal fourth quarter, with the companuy now being "cash neutral".
Although the Covid-19 pandemic has severely hit its business from late second-quarter, new contract wins remained robust, and retention was high, the firm said.
Compass also highlighted contract renegotiations that reflect the difficult trading environment, continued discipline in terms of costs and some improvement in volumes.
In the year ended 30 September, underlying operating profit fell by nearly 70% to 561 million pounds, with operating margin crumbling to 2.9% from 7.4% last year.
But Compass said it expects its margin in the first quarter of fiscal year 2021 to be around 2.5%, and committed to rebuilding its underlying margin to above 7% before returning to pre-Covid volumes.
Investors cheered the news, and with the Compass shares soared 4.9% on the London Stock Exchange on Tuesday morning.
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