(Reuters) – French catering group Sodexo plans to spin off its Benefits & Rewards Services business and list it on the stock exchange in 2024, an announcement that will send the stock soaring on the Paris Stock Exchange.

The company had abandoned a plan last May to sell a minority stake in Benefits & Rewards Services, which provides business benefits vouchers and cards for employees. Now, it plans to split this division and list it by distributing shares of the company to Sodexo shareholders.

This operation will allow its two main activities to be better placed to take advantage of fast-growing markets, the group added. “Each entity, more refocused, would thus be in a stronger position to pursue its strategy, achieve its objectives and fully realize its potential,” said Sophie Bellon, Chief Executive Officer of Sodexo, in the press release.

“The activity is going very well, it is driven by interest rates, by inflation (…) so it’s the perfect time to put this nugget on the market and allow it to take off from its own wings,” she added at a press conference.

Sodexo declined to comment on the potential valuation of its Benefits & Rewards Services division. The group added that the founding Bellon family, which holds 57.5% of its voting rights, would remain a reference shareholder.

On the Paris Bourse, the Sodexo share soared 10.1% to 99.44 euros at 08:52 GMT, its biggest rise in session since January 2021.

“The abandonment of the partial sale project in May 2022 was a disappointment, so that it is back on the table is positive,” commented Richard Clarke, analyst at Bernstein.

The Benefits & Rewards Services division reported operating income of 162 million euros in the first half of 2023, or 46.4% more than a year ago, excluding currency effects.

For the entire Sodexo Group, operating profit was 704 million euros, beating analysts’ average forecast of 679 million euros, according to a consensus compiled by the company.

“The inflation suffered is higher than what we pass on to our customers, but we manage because we have what we call action plans to mitigate the impact of inflation, it’s thanks to that that we keep our margins”, assured Marc Rolland, financial director of the group, during the press conference. Sodexo has also raised its full-year 2023 revenue forecast and now expects organic growth close to 11%, compared to 8% to 10% previously announced.

For the Benefits & Rewards Services division, organic revenue growth is expected close to 20% for the 2023 financial year and the operating margin close to 32% at constant exchange rates.

(Report Diana Mandiá, Gaëlle Sheehan, edited by Matthieu Protard and Blandine Hénault)

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