Catering Company Elior Records Drop In Revenues
French catering company Elior has recorded a drop in revenues.
Elior warned that it is continuing to lose customers in the COVID-19 pandemic, sending its shares almost 5% lower.
Europe's third biggest contract caterer said that its customer retention rate fell to 91% in the six months to the end of March from 92% the year before.
No Full-Year Guidance
It did not give full-year guidance.
Elior Chief Executive Statement
"We are in a contract business, it's an everyday battle," Elior chief executive Philippe Guillemot told analysts in a call, adding the group's 95% customer retention target could be pushed back from an original 2024 deadline.
"Especially with COVID-19, assumptions used to sign contracts were not met for months, and we had to enter into negotiations," he added.
Credit Suisse Analysts Statement
Credit Suisse analysts said that the situation could get worse as some customers have decided to delay tenders.
Approximately 14,000 Contracts
Elior has approximately 14,000 contracts with organisations including schools, businesses and hospitals.
First-half revenues dropped 22%, for a core loss of €25 million - the first since the group's 2014 return to Euronext.
However, after over a year of lockdowns, results were better than feared, with Elior delivering a positive free cash flow and bolstering its cash reserves on the back of a state-backed loan.
Not Expecting Material Recovery Before September
Elior does not expect its business and industry operations to see material recovery before September, and warned of more stringent health restrictions in French schools - with entire classes sent home after a single positive COVID-19 test.