Sodexo boosts guidance, shares surge

(Sharecast News) - Shares in Sodexo rallied on Thursday, after the French catering giant posted above-forecast third-quarter numbers and lifted full-year guidance.

Quarterly revenues came in at �6.2bn, up 0.9% or 2% on an organic basis, beating expectations for a 0.1% dip.

Thierry Delaporte, chief executive, said trading had been driven by "resilient demand" across the business. He continued: "While we entered the quarter with a cautious view of the operating environment, we were able to mitigate a number of risks by capturing opportunities across the portfolio, particularly at Sodexo Live North America."

Looking to the full year, the Paris-listed firm said it now expected organic revenues to grow by between 1.2% and 1.5%, up notably on previous guidance for 0.5% to 1%. The underlying profit margin guidance was maintained at between 3.2% and 3.4%.

As at 1000 BST, the stock had soared 8%.

Delaporte said: "We are moving with urgency on our action plan to return to growth, restore competitiveness and strengthen execution capabilities. The organisation continues to mobilise behind key transformation priorities."

Shares in Sodexo plunged earlier in the spring on the back of disappointing interim earnings. At the time, Delaporte - who replaced former incumbent Sophie Bellon last November - acknowledged the 60-year-old business had underperformed both the market and its main competitors, and cut guidance. But he insisted the company was "moving with a strong sense of urgency".