Compass Group PLC (LON:CPG) shares dropped on Tuesday as the contract caterer served up a profit warning, saying the first half will be lower than expected due to the closures of sports, leisure centres and schools in Europe and North America.
In a statement, the FTSE 100-listed firm said it estimates operating profit for the six months to 31 March will be £125mln-£225mln, or 25-30% lower than expected.
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Organic revenue growth will be between 0-2%, the company added, saying it is implementing “significant” plans to manage costs and protect cash flow.
For the five months to 29 February, Compass's organic revenue growth was 6% as measures to contain the virus in Asia Pacific did not “materially” hit results.
Analysts at Liberum Capital said the impact of coronavirus is expected to continue in the second half of the financial year as well. The broker maintained a 'hold' rating and 2,000p target price on Compass Group.
In lunchtime trading, Compass shares were 12% lower at 986.40p.
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