Global catering firm Sodexo seen slight growth for the start of 2017 despite activity in the North Sea dropping by 16%.
The French food and facilities management firm saw organic growth for the first fiscal half of the year increase by 1.2%.
Revenues for the six months ending February 28 was 10.6billion euros, a slight increase on last year’S 10.59billion euros.
Pre-tax profit for the period for the six months was 532million euros, down from 577million euros.
This excludes the impact that the 2015 Rugby World Cup had on the comparable 2016 figures as well as the continuing oil downturn.
Including the lack of a major sporting event such as the rugby and the downturn of activity in the North Sea saw growth contract by 0.3% in the first half fiscal year of 2017.
Sodexo chief executive Michel Landel said that the first fiscal half results were “in line with expectations”.
Earnings before Interest, Taxes, Depreciation and Amortization dropped to 1.3 billion euros from 1.4billion in the same period last year.
Landel said: “Revenue growth accelerated in the second quarter as expected, we have signed significant new contracts and the pipeline remains strong.
“Our savings plan is well on track and delivered 60 million euro in the first half of the fiscal year, helping us to achieve a 50 Basis point (bps) improvement in operating margins while we continue to make investments that will contribute to future growth.”
Landel also said that the forecast for the second half the year expects the comparative base to become “easier”.
He added: “As a result, we expect organic growth of around 2.5% for the full year. Our efforts to control costs and adapt our organization will continue to deliver and so we confirm our objective of growth in operating profit of between 8 to 9% for this fiscal year – excluding currencies and before exceptional expenses.”
Sodexo said it saw “solid growth” in corporate North America, health care and developing markets.
This was offset by a “challenging environment” in Europe due to continued weakness in energy and resources activity in the North Sea and more generally, in France, the fiscal report said.
The report said: “The organic decline of -5.5% in Europe reflects the concentration of all the major issues of the quarter with the full Rugby World Cup effect, a 16% fall in North Sea Energy & Resources activity, and general weakness in France. Excluding the Rugby World Cup sources, organic growth would have been -2.6%.
“Energy and resources is improving regularly quarter by quarter, even if activity in the North Sea is still down by 16% in both quarters.
“Elsewhere, while government services activity remained difficult during the quarter, corporate services activity was solid with high single digit growth in North America and the developing economies more than offsetting continued weakness in Europe.”
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