Sodexho reports profits rise of 7.5%

Chief executive Michel Landel group said operating profit was boosted by a recovery in the UK, where operating margin rose to 4.9%, against a figure of 3% in the previous year, and organic sales growth reached 6.1%. Operating profit was £448.5 million, 5.7% up on last year's figure which itself was inflated by the sale of US-based assets. Two major factors on the group's figures have been the depreciation in value of the dollar and food price inflation, which he said has been running at 4% and expected to be similar or even slightly higher in the year 2007-08. He added the company expects good business growth in all regions next year despite the uncertainties posed by fuel and commodity price rises and unstable currencies. To counter food-price inflation Sodexho was using a range of strategies, including raising prices, adjusting menus and productivity gains in purchasing. Landel said growth targets for next year included 7% for organic sales and 12% on operating profit that would be achieved thanks to the growing diversity of the group's operations. This includes training contracts with Nokia and Tata, and its selection as preferred bidder for a training contract for the UK army. It was also reported the group plans to change its corporate name to Sodexo from Sodexho Alliance, dropping of the 'h' eliminate any confusion over links with the hotel industry. For more visit www.sodexho.com.