April 16 (Reuters) - French voucher and benefits company Pluxee reported 2.8% organic growth in its second-quarter operating revenue on Thursday, but missed market estimates, weighed down by negative
Voucher firm Pluxee beats profit expectations in tightening market
By Dimitri Rhodes
Pluxee's Financial Performance and Market Context
Strong Profit Growth Amid Market Challenges
April 16 (Reuters) - French voucher and benefits company Pluxee reported 12.9% organic growth in its recurring half-year core profit on Thursday, topping market expectations, as strict cost discipline and efficiency measures shielded margins from soft European sales.
Pluxee's shares rose 2% by 0842 GMT, with analysts from J.P. Morgan pointing to a "strong margin delivery" at 37%. Analysts polled by the company had expected a core profit margin of 35.9% on average.
Impact of Global Events on European Markets
Private sector growth in the euro zone nearly stalled in March after the U.S.-Israeli war with Iran caused the closure of a key transport corridor and a sharp rise in fuel prices. Major economies like France have started to see business confidence tumble.
"We're starting to see ... more caution in (our European clients') investment decisions, and some hiring decisions may also be put on hold for a period of time," CEO Aurélien Sonet told journalists on a wire call.
Regional Performance and Strategic Shifts
Recurring Earnings and Analyst Expectations
Recurring earnings before interest, taxes, depreciation and amortization (EBITDA) were 242 million euros ($285 million) in the first half of the financial year, 5 million above analysts' consensus.
Growth in Tertiary Geographies
Benefits providers like Pluxee and Edenred are increasingly relying on tertiary geographies like Latin America to drive profits, as they cope with slowdowns in their main business regions.
However, new free caps in Brazil will soon weigh on results in this region too.
BRAZIL RULE CHANGE TO DENT REVENUE IN H2
Pluxee is adapting to new regulation in Brazil that has capped merchants' fees at 3.6% since March, with additional measures on interoperability expected in mid-May, Sonet said.
"In the second half of the year, we expect a negative impact from Brazil on our revenue growth," he said.
Pluxee said in January it expected a 50% revenue drop in Brazil by next year. On Thursday, Sonet said this would be a worst-case scenario.
($1 = 0.8480 euros)
(Reporting by Dimitri Rhodes in Gdansk, editing by Milla Nissi-Prussak)
