StockMarketWire.com - Food services group Compass flagged a £100 million contract impairment charge, though said its business was now breaking even at a trading level, following improved performance in the fourth quarter.

The company said its fourth-quarter underlying operating margin was expected to be around negative 3%, an improvement from negative 5.2% in the third quarter.

The full-year underlying operating profit margin was expected to be around 3%.

Resizing costs in the fourth quarter were around £90 million, bringing total resizing costs for the 2020 financial year to around £130 million, the company said.

At current spot rates, foreign exchange translation was expected to reduce reported revenue and underlying operating profit by around £355 million and £28 million respectively.

'The group's organic revenue performance in the fourth quarter improved as clients in education and business & industry began to return to schools and offices in our main markets,' Compass said.

'The pace at which our revenues and margins will recover remains unclear, especially given the possible increase in lockdown measures in the Northern Hemisphere through the winter months,' it added.

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