Businesses cutting jobs has led to less demand in staff canteens, the boss of catering giant Compass said on Tuesday as warned of redundancies and a £300 million writedown.
The world’s biggest catering firm said it is has set aside £300 million for 2019 and 2020 to react to “the backdrop of of a deteriorating macro environment in Europe”.
Around half of the figure will be accounting writedowns linked to loss-making contracts, and the remainder will be used towards restructuring, including redundancies, to cut costs.
Compass expects around 0.5% of the 600000-strong global workforce will be affected by redundancies. In the UK it is understood the number of roles lost would be in the low hundreds region.
Compass chief executive Dominic Blakemore said there had been some “pressure on our volumes in business and industry” in Europe, including the UK, France and Germany.
The firm added: “Consumer confidence continues to decline and a number of key clients, notably in manufacturing, automotive and financial services, have reduced their headcount in recent months.”
Shares in Compass dropped 118p to 1953p.
Blakemore was more upbeat as he outlined results for the year to September 30.
He said the group's sports division performed well, with the group supplying catering at Wimbledon and securing a contract extension with Chelsea Football Club.
He pointed to a strong growth in north America and said group sales increased 6.4% to £25.2 billion. That is its highest annual growth rate in a decade.
Pre-tax profits were 3.5% lower at £1.5 billion. Operating profit was up 4.7%.
Blakemore said: “Our expectations for the group in 2020 are positive although we remain cautious on the macro environment in Europe.”
He said: “In the longer term, we remain excited about the significant structural growth opportunities globally, the potential for further revenue and profit growth, combined with further returns to shareholders."
