Bloomberg are reporting that Compass Group are looking at a new share issue to increase liquidity in the business to further combat the impact from Covid-19.
For the world’s biggest catering services provider employing 600,000 people, the impact from Covid-19 has hit hard. It has seen the company’s share price fall circa 40% this year so far.
About 55% of its business capacity around the globe is closed due to lockdowns in various countries.
Like other global hospitality businesses long term liquidity in its balance sheet is vital to weather the Covid-19 storm. Yesterday we reported Accor securing €4 Billion of long term liquidity financing.
Like Accor, Compass has suspended dividends and implements other cash flow exercises to hold as much cash as possible.
CEO, Dominic Blakemore has taken a temporary 30% cut in his salary, and all of the company’s other board members and executive committee have reduced their compensation by 25%.
The London Stock Exchange liked the share issue news as the Compass share price yesterday closed up + 63.50 points, 5.83%, to 1,153.50.
Reuters yesterday evening reported a number of financial commentators favouring the plan to increase share capital. Some suggesting small acquisitions could also be in the pipeline for Compass.
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