Sodexho set to boost net profit by 5%

Sodexho Alliance, the world's second largest catering company, has told analysts that it expects to grow net profit by 5% in the following year.

In an upbeat forecast, Sodexho directors said that, based on today's economic climate, the group had enough operating cash-flow to finance growth, reimburse debt and reward shareholders.

Operating profit for next year is forecast to grow from €514m (£358m) to €550m (£383m), in line with its target operating margin of 4.6% of sales.

However, the company said that in order to meet these targets it would need to make a number of improvements to its operations. These included "encouraging transparency and communication" and "reinforcing control".

Last year its UK operations were marred by accounting irregularities that set its objectives back by a year.

Sodexho reported its full-year financial results last week. In the year to 31 August turnover fell 7.3% to €11.7b (£8b) and net profit dropped 11.3 % to €162m (£113m).

During the year Sodexho retained a record $1b (£592m) contract with the US Marine Corps, and won contracts with companies such as GlaxoSmithKline in London, Wal-Mart in Germany and Motorola in China.