French catering and food services group Sodexo plans to spin off and list its voucher business during 2024, it said on Wednesday, sending its shares up as much as 11.2 per cent to top the pan-European Stoxx 600 index.
The shares touched their highest price since February 2020, before the Covid-19 pandemic forced the closure of offices, canteens, sports and concert venues.
Sodexo last May scrapped a plan to sell a minority stake in the Benefits & Rewards Services (BRS) unit, which delivers vouchers and benefit cards to businesses for employees.
It now plans to spin off the activity, which has 5,000 employees in 31 countries, by distributing shares to Sodexo shareholders.
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“The business is doing very well, driven by interest rates, by inflation ... so it’s the perfect time to put this jewel on the market and let it fly on its own,” chief executive Sophie Bellon told reporters.
Voucher groups are benefiting from the cost-of-living crisis as employers look for ways to support staff without hiking wages.
France's Edenred, known for its “Ticket Restaurant” vouchers, in October said it expected to accelerate profit growth over the next three years as companies use its meal tickets and fuel cards to help staff cope with inflation.
Sodexo declined to comment on the value of the voucher business after it is spun off. It said the Bellon founding family, which controls the group with 57.5 per cent of the voting rights, would remain a core shareholder.
The BRS business reported a core profit of €162 million in the first half of 2023, up 46.4 per cent from a year earlier excluding currency impacts.
Core profit for the group was €704 million, beating analysts’ average forecast of €679 million in a company-compiled consensus.
Sodexo said price increases would remain above 5 per cent in the second part of 2023. “Inflation is higher than what we pass on to our customers, but we manage it because we have action plans to mitigate the impact, that’s how we keep our margins,” finance chief Marc Rolland said.
The company said it expected organic revenue growth of close to 11 per cent in fiscal 2023, compared with its previous forecast of 8 per cent to 10 per cent. – Reuters
