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Services group Sodexo eyes sales growth acceleration, looks for more deals

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Services group Sodexo eyes sales growth acceleration, looks for more deals

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PARIS (Reuters) – French facilities management and vouchers group Sodexo <EXHO.PA> said on Thursday that its cost reduction plan was on track, and expressed confidence in its ability to accelerate sales growth in the current fiscal year. Sodexo, which is buying for $675 million U.S. company Centerplate – which provides food and hospitality at sports, convention and entertainment venues – said its strong financial structure gave it scope to eye more acquisition targets. Sodexo, the world’s second-biggest catering services company after Compass Group <CPG.L>, made the forecasts after posting a rise of 1.9 percent in like-for-like revenue to 20.698 billion euros (18.51 billion pounds) for the fiscal year ended August 31. Sodexo warned in July that full-year revenue growth would be less than initially expected after a weaker third quarter. Sodexo, however, said on Thursday that trends were turning positive again in France and in its division dealing with the energy and resources sectors, although growth remained modest in at its ‘Education and Health Care’ arm in North America. Operating profit before exceptional items rose 8.4 percent to 1.326 billion euros, broadly in line with the group’s guidance for a increase that would come in at the bottom of an initial 8-9 percent range. Sodexo was expected to post revenue of 20.735 billion euros and operating profit of 1.379 billion, according to an Inquiry Financial poll for Reuters. For the current 2017-2018 fiscal year, Sodexo forecast underlying revenue growth of between 2-4 percent, and a flat underlying operating margin at 6.5 percent of sales. It also confirmed its medium-term goals.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)
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