Compass at ‘breakeven point' although Europe continues to lag

Compass has said its global business returned to a breakeven trading level in Q4, although revenue in Europe remained 39% below the previous year.

The Q4 results compared to a 53% decline in Q3, with full-year results expected to be 25% below the previous year.

Europe saw continued good performance across healthcare portfolios and a "meaningful increase" in reopenings from business and industry and education clients. However, sports and leisure portfolios remain largely closed.

Globally the business expects to break even in Q4 before contract impairments are considered and following the reopening of many units. At this stage Compass believes it will have to impair around £100m in contract assets.

This morning's trading update stated: "We are pleased with our progress in the quarter and that the business is now at breakeven trading level. We continue to proactively manage the business, reducing our costs, rebuilding our margins and investing to strengthen our competitive advantages. However, the pace at which our revenues and margins will recover remains unclear, especially given the possible increase in lockdown measures in the Northern Hemisphere through the winter months.

"Despite the current challenges, when looking further ahead, we remain excited about the significant structural market opportunity globally, and the return to organic revenue growth, margin improvement and returns to shareholders over time."