April 12, 2018 / 5:09 AM / 10 days ago

French group Sodexo's H1 core profits fall, keeps toned-down guidance

PARIS, April 12 (Reuters) - French food services and facilities management group Sodexo on Thursday reported a well-flagged fall in first-half core operating profit and kept its recently reduced targets for sales growth and margins for the 2017/18 full year.

Sodexo, which is the world’s second-biggest catering company after Compass Group, nevertheless said its board had approved a 300 million euros ($371 million) share buy-back programme, reflecting confidence in its future prospects.

First-half underlying operating profit declined 7.4 percent percent from a year earlier to 627 million euros, amid weakness at the company’s north American business.

Sodexo reiterated its earlier March 29 forecast that it expected to deliver organic revenue growth of between 1-1.5 percent for the 2018 fiscal year, and an underlying profit margin of around 5.7 percent.

It had issued that warning after giving an estimate of its first-half results, which missed expectations.

In January, Sodexo had previously forecast revenue growth of between 2-4 percent and a flat operating margin at 6.5 percent of sales for the full year ending August 31, 2018, excluding the impact of acquisitions and currency movements.

$1 = 0.8093 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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