PARIS French food services and facilities management group Sodexo said organic revenue fell 1.5 percent in the first quarter of the 2016/17 fiscal year, reflecting weakness in its energy and resources unit and higher year-ago comparables.
Sodexo, which is the world's No.2 catering services company after Britain's Compass Group, said it was nevertheless confident of achieving its full year targets as revenue growth would progressively accelerate in the coming quarters.
The group said those challenging year-ago revenue comparables would progressively ease off from the second quarter onwards, and added it was banking on a stronger new business pipeline and an improvement at its energy and resources unit, which provides services on oil and gas platforms and mining sites and whose sales fell 4.5 percent in the first quarter.
In November, Sodexo had warned the first quarter would be tough against the year-ago quarter, which included the Rugby World Cup contract which gave a boost to its business, saying it would be "very small to slightly negative".
Sodexo manages canteens and facilities for office workers, armed forces, schools, hospitals and prisons, and also supplies vouchers for meals and gifts. Its clients range from the Royal Ascot Racecourse in England to the U.S. Marine Corps.
Revenue reached 5.45 billion euros ($5.8 billion) in the three months to Nov. 30, an organic decline of 1.5 percent, reflecting contract losses and weak demand in France and Britain, although there was stronger demand for facilities management services in north America.
Sodexo kept its forecast for underlying revenue growth of around 3 percent and a rise in operating profit, before exceptional items and excluding currency effects, of between 8 percent and 9 percent, for the full year.
Sodexo shares, which rose around 20 percent in 2016, are down around 1 percent so far in 2017.
($1 = 0.9429 euros)
(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta)