CAMFIL HVAC Filtration Solutions

A Tale of Two Caterers

19.03.2020, 14:13

A Tale of Two Caterers

Sodexo shares have risen 4 per cent following a statement the company expects its Half-Year 2020 performance to be broadly in line with previous forecasts, with Compass Group shares falling by a similar amount in afternoon trading in response to a revised earnings statement and negative investor sentiment over the impact of COVID-19 and Brexit on its UK contract catering businesses.

Addressing the impact of COVID-19, yesterday Sodexo’s Board, reported:

At this stage, it is too early to determine the impact that these combined factors may have on the Group’s second half results. Based on the last few weeks’ observations in China, Italy, France and the USA we can see that for each 100M€ of revenue decline the impact on underlying operating profit is around -30% depending on the country and the segment.

We are currently running a full bottom-up forecast exercise based on closures and revised traffic estimates and will provide an update on April 9th along with our [Half-Year] H1 results. Currently, early estimates, given the many moving parts, could be for an impact of around 2 billion euro on annual revenues.

While we remain confident on our strong market and financial position, and the midterm positive perspectives and potential of Sodexo, we have no other choice at this stage but to suspend our guidance confirmed in January until the situation stabilizes.

Compass Group shares are currently trading 40.80p (4.02 per cent) lower following a warning on Tuesday that the group expects significantly lower demand for catering services as a result of government restrictions imposed in response to the COVID-19 pandemic.

CAMFIL HVAC Filtration Solutions

Staff Reporter covers the latest news, trends and opinion from the facilities management (FM) and corporate real estate (CRE) sectors. The FM market is currently estimated to be worth USD 1 trillion annually and is projected to grow at a compounded annualised rate of approximately 5% between now and 2026.

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