PARIS (Reuters) - Elior (ELIOR.PA), Europe’s third-largest catering group, reported a rise in revenue and core profits on Friday, along with a 31.3 percent increase in the dividend.
Elior, which competes with France’s Sodexo (EXHO.PA) and Britain’s Compass (CPG.L) predicted futher growth for the current year which started in October and expressed confidence over its longer-term goals.
“We achieved our financial objectives for 2015-16. We expect profitability to accelerate this fiscal year and are confident in the group’s longer-term outlook,” Chief Executive Philippe Salle told reporters on a conference call.
Elior has a contract arm, which provides catering to businesses, schools and hospitals and accounts for around two thirds of the firm’s overall business. It also has a concessions business, which serves airports, railways and motorways.
Revenue rose 3.9 percent to 5.896 billion euros (4.97 billion pounds) in year ended Sept. 30, helped by acquisitions in the United States and Britain, with 52 percent of revenues coming from abroad compared with 50 percent the previous year.
Closely-watched organic revenue, which excludes the impact of voluntary contract exits, rose 3.1 percent in the period, in line with a company’s target of 3 percent or above.
Robust contract catering sales more than offset a slight decline in concessions catering, which suffered in France from the loss of the Roissy airport contract and from the impact of Islamist attacks on museum, airport and railway concessions.
Salle said the loss of the Roissy contract cost the group 24 million euros in lost revenue and the attacks 5-10 million.
Earnings before interest, tax depreciation and amortisation (EBITDA) rose 5.5 percent to 501 million euros ($532 million), giving a profit margin of 8.6 percent, up from 8.4 percent in the previous year.
For the current year the company, whose customers include the Vatican museum and Los Angeles airport, expects organic revenue growth of at least 3 percent, an increase in EBITDA margin of between 0.2 and 0.3 percentage points, excluding acquisitions, and a significant rise in EBITDA and adjusted net earnings per share.
Commenting on 2020 goals, Salle said the revenue target of of between 7 and 8 billion euros was “easily achievable”.
He was also confident of reaching 2020 targets for an EBITDA margin of 9 percent to 10 percent of revenue and a free cash flow to EBITDA ratio of between 45 percent and 50 percent.
($1 = 0.9422 euros)
Reporting by Dominique Vidalon; Editing by Mathieu Rosemain, Greg Mahlich