Compass Group Won't Recommend Dividends Due to Coronavirus; CEO Takes 30% Salary Cut

By Anthony O. Goriainoff

Compass Group PLC said Thursday that it won't recommend an interim or final dividend for fiscal 2020, and that its chief executive officer has temporarily reduced his salary by 30%, both due to the coronavirus pandemic.

The U.K. catering contractor said the board and executive committee have reduced their fees and salaries by 25%, and that it expects a drop in first-half operating profit by 28% to 29% from virus-related shutdowns. The company said its organic revenue growth for the first half of 2020 was 1.6%, and that this was within its expected 0% to 2% range.

The company said its net capital expenditure for the first half was around 400 million pounds ($492.8 million) and that it expects capex to be lower in the second half ending Sept. 30. The company added that it has paused all mergers-and-acquisitions activity.

Compass Group said it is taking measures to strengthen liquidity, and as a precautionary measure it is in discussion with its U.S. private placement investor to obtain a waiver of its covenant tests. The company said it has committed credit facilities of GBP2.8 billion.

Write to Anthony O. Goriainoff at [e-mail]

(END) Dow Jones Newswires

April 23, 2020 02:54 ET (06:54 GMT)

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