UK division trailing as Sodexho raises sights
French catering company Sodexho Alliance has lifted its global sales target for the financial year to the end of August 2004 to an increase of nearly 4%. But the company's UK and Ireland division continues to trail behind the rest of its business, because of its reorganisation.
At the beginning of the year, the company - the world's second-largest catering firm behind Compass - predicted organic sales growth of 3.1%.
The new prediction came as Sodexho revealed its sales figures for the first nine months of the financial year to 31 May.
Overall, the company posted a 2.4% drop in sales to g8.85b (£5.89b) for the period, compared with g9.07b (£6.03b) last year. Taking into consideration the effect of currency fluctuations, the figure represents organic sales growth of 4.5%.
Sodexho's stock leapt on signs it was showing underlying growth. In the company's food and management services division, organic sales growth was 4.4% in North America, 4.7% on Continental Europe and 18.8% in the rest of the world.
In the UK and Ireland, sales fell by 6% to g989m (£658), from g1.09b (£0.73b) last year as it continued to restructure its UK business.
A company spokesman said: "Three years ago, we put in place an action plan to bring back profit in the UK. We are continuing to stop contracts that are not profitable, and that is why sales are down."
