Sodexo boosts worldwide sales but UK revenue drops
Sodexo, the world's second largest contract caterer, saw UK and Ireland revenue fall by 3% in its last financial year.
Unveiling results for the 12 months to August 31, the French-owned company said revenue for UK and Ireland was down to €1.3b (£1.15b).
However, stripping out the effect of the Rugby World Cup catering contract - which significantly boosted revenue in the first quarter of 2008 - organic growth was up by 6.7% year-on-year.
Globally, Sodexo saw revenue of €14.7b (£13.2b), up 2.5% year-on-year on a like-for-like basis, and operating profit of €746m (£670m), up 8.1%.
Michel Landel, chief executive of Sodexo, attributed the slow growth to clients in the US and Europe, which account for the bulk of catering revenues, cutting discretionary spending and reducing staffing levels as a result of the global downturn.
"The crisis has slowed our new business development and weighed on comparable unit growth on existing sites," he said.
Landel said sales would continue to be slow before a recovery half way through its 2010 financial year, but added that he was "fully confident" of the company's ability to reach medium-term targets of annual average sales growth of 7% and an operating margin of 6%.
Aidan Connolly, chief executive, Sodexo UK and Ireland, said:"I am pleased that we have solid like for like results in these difficult economic times. We are cautiously optimistic about the coming year.
"What is clear is that companies are increasingly looking for cost efficiencies and we hope that this safeguards the stability of outsourcing companies such as ours.
"Over the last year, we believe that our emphasis on cost control and innovation are factors which have been critical in both securing new contracts and developing existing relationships with clients".
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By Daniel Thomas
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