The world’s largest caterer, Compass Group, said it has received £437m of government support to help it through the pandemic this year.
Outlining how Covid-19 had impacted its approach to costs in its latest full-year results announcements, the firm said it has taken a series of measures to reduce its food costs to offset the impact of lower volumes.
At the start of the pandemic in March, Compass saw its sports and leisure and education and B&I division close entirely almost overnight.
Total revenues at the firm, which employs 600,000 staff globally, have fallen 19% versus last year, although the business returned to profitability in its latest quarter.
Chief executive Dominic Blakemore said that in markets where little or no government support was available, the company acted acted quickly to adjust its cost base and is already seeing the savings materialise.
In markets where government support was available, it used it to limit job losses, he added.
“This year we received £437m of government support. However, whenever government support has ended, we have evaluated our staffing needs and taken the necessary steps to ensure that we avoid carrying excess costs.”
Although he described resizing as an “ongoing task”, the actions it has taken so far will avoid annual in unit labour costs of around £280m and annual savings of above unit costs of £70m, both of which will be essential for it to rebuild its margins back to above 7%.
Resizing action in the year totalled £122m. In addition, the cost action programme that Compass announced in November 2019 has incurred £75m of costs in the year and is delivering the savings initially anticipated.