July 23, 2019 / 5:16 AM / 25 days ago

French company Edenred eyes record 2019 profits after strong first-half

PARIS (Reuters) - French pre-paid meal vouchers and card provider Edenred (EDEN.PA) predicted a further rise in operating profit which should reach a new record level in 2019, after posting strong first half results.

Edenred, which helps companies manage staff expenses and benefits and is known for its ‘Ticket Restaurant’ vouchers, expected the second half of the year to mirror the first-half, which saw double-digit revenue growth in all business lines and regions.

The group said it will also benefit from the integration and ramp-up of recent acquisitions and partnerships and a pick-up in the Brazilian economy if a pension reform passes by end-Summer.

“We are confident in our ability to deliver profitable and sustainable growth. We are well on track to deliver a record year,” Chairman and CEO Bertrand Dumazy told a conference call.

Edenred said total EBIT (earnings before interest and tax) reached 249 million euros ( £224 million )in the first-half.

That marked a like-for-like rise of 15.4%, excluding the impacts of currency rates, acquisitions and divestments. Revenues also rose by 14.6% to 777 million euros.

Edenred shares dipped 0.2% in early session trading, although the stock remains up by around 40% so far in 2019.

Traders said first half revenue beat expectations of 760 million euros but operating EBIT of 220 million slightly lagged expectations of 233 million.

Edenred, which competes with caterer Sodexo (EXHO.PA) as well as with Fleetcar and Wex in fuel cards and with Wirecard or Visa in payment systems, forecast EBIT between 520 million euros and 550 million euros this year, versus 461 million in 2018.

ACQUISITION FIREPOWER

Edenred, which last year decided against buying a stake in French payments company Ingenico (INGC.PA), recently bought U.S. firm Corporate Spending Innovations (CSI) for around $600 million.

It also recently bought a minority stake in next-generation workplace learning technology company Fuse Universal and acquired Italian employee engagement platform Easy Welfare.

Dumazy said the group, which spent 798 million euros on acquisitions in the past 12 months, still had firepower for at least 1 billion euros worth of deals.

“Our acquisition policy remains unchanged. Bolt-on deals in employee benefits, possibly larger deals in fleet and mobility solutions. In corporate payments, the U.S. is our priority but we are for now focused on CSI integration,” he said.

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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