The world’s largest catering company saw revenue shrink 20% to £19.9bn in the year to end-September 2020 due to the impact of COVID-19 on volumes from business, education and sports & leisure customers in all three of its major regions.
Operating profits crashed 82% to £294mln as the fall in revenue was combined with a resizing programme to adjust the cost base, impairments of assets, onerous contract charges and foreign exchange.
Free cash flow shrank 83% to £213mln and, having used government furlough schemes for many of its employees, last year’s 40p per share dividend was not repeated.
Net debt at the end of September was £3bn, though after a £2bn cash call in the summer the FTSE 100 group had £4.8bn of available liquidity.
Having returned the business to profitability in the fourth quarter and now running cash-neutral, chief executive Dominic Blakemore said: “We are improving the quality of the business and will emerge from the pandemic stronger than we've ever been.
“We recognise the importance of the dividend to our shareholders and the board looks forward to reinstating it when considered appropriate.”
Shares in the company, which before the recent raft of positive vaccine reports were down 44% since the starts of the year, rose another 5% to 1,412p by mid-morning on Tuesday.
Analysts at UBS said the headline results appeared to be a broadly in line with expectations, with adjusted EBITA a touch higher than the consensus forecast.
The analysts noted that first-quarter margins are expected to be around 2.5%, which is lower than expected, but that management are flaging an eventual return to 7% margins.
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