Profit warning at Compass fattens job threats |
|
|
Published
:
Thu, 19 May 2005 18:05
|
The ongoing economic slowdown which has seen quite a few companies announcing job cuts and sending out profit alarms, has yet another member joining the bandwagon; a leading catering group, Compass.
Compass saw its half-year profits slide sharply by 7.8%, which further prompted it to voice its plans of cutting costs, reducing overheads and augmenting profit. This inevitably, poses a threat to jobs at the organisation, in view of the radical fall in profits.
Chief executive, Mike Bailey, elucidated that he intended to rein in as much as £50m as savings in the forthcoming one and a half years, clarifying that it could happen by “purchasing, overhead reduction and labour productivity”.
The world biggest catering service, Compass has about 400,000 employees working in 90 countries with 110,000 workers operating solely in Britain.
| Bailey, meanwhile, confessed that the performance of the company was disheartening. He said, “I am not happy with our recent performance. We need to respond more rapidly than we have to the changes taking place in our market.” However, Bailey dismissed all rumors floating in the industry about him following suit to chairman Sir Francis Mackay who is expected to make an exit next February.
Stating his point, Bailey said, “If someone is not happy with what I am doing then I am sure the board will come and speak to me about it. From my point of view I am committed to improving the business.”
He also ruled out all possibilities of Compass doing away with its education arm business, Scolarest, following the recent outrage over its school meal operations. Scolarest that supplies food to 2,200 schools has been facing rough weather, ever since public campaigns opposing processed and ‘unhealthy’ foods rocked the company. Scolarest was serving Turkey Twizzlers to children in school meals and ended up losing two local education authorities contracts during that time.
Bailey, nevertheless, maintained a positive tone and said that he agreed with celebrity chef leader of the campaign, Jamie Oliver’s perspective of providing nutritional foods to children. He said that, “It helps our cause to charge a better price and do a better job. We have taken out processed foods.”
Compass’s pre-tax profits fell 14.5% to touch £124m for the half year ending 31 March. Even though the company’s UK turnover increased to £6.2bn from £5.84bn, its education sales plummeted by 2%. Compass also announced today that it was selling a 75% stake in Au Bon Pain, its North American bakery cafes’ chain for about £54m. However, any other disposals were not revealed.
|
|
|
|
|
|
Print this Story
