Compass Group - the world's biggest contract caterer - yesterday warned shareholders that annual profits would fall below forecasts, sending its shares down ten per cent.
The group also confirmed that under-fire chief executive Mike Bailey is to quit his post next year.
Compass, whose clients include London Zoo and the Pentagon, is also selling its Select Service Partner (SSP) travel-concessions business to focus on support services and contract catering, where winning and retaining contracts requires less capital investment.
The decision to offload the SSP operation - based at airports, railway stations and motorway service areas - follows a strategic review at the firm, which has shocked the City with two profits warnings over the past year.
SSP operates in 25 countries including the UK, and counts Harry Ramsdens, Millie ' s Cookies and WhistleStop among its brands.
Parties have already shown an interest in the business, although Mr Bailey declined to suggest a price, or whether potential buyers were within the catering trade. But in the City a price tag of £1 billion was being mooted.
Proceeds from any sale will be ploughed into strengthening the balance sheet and paying down debt, although some will be returned to shareholders.
Pressure on Mr Bailey has been mounting after Compass in March issued its second profit warning in the space of six months.
First-half earnings fell 7.8 per cent after lucrative contracts to feed coalition forces in Iraq and elsewhere in the Gulf were replaced by lowermargin peacekeeping ones. In light of those problems the company said it would be forced to write down the value of assets by around £40 million.
It added that full year profit before tax, goodwill amortisation and exceptional items is expected to fall ten per cent to £580 million. Set up in 1941 to feed munitions workers during the Second World War, Compass has embarked on a buying spree in recent years as it looked to expand its geographical presence and serve new industries.
But with margins threatened at a number of its divisions, the company has been under pressure to hive off underperforming assets and return funds to shareholders.
Mr Bailey said: "Whilst in the short term the company has been through a challenging period, particularly in the UK, I am satisfied that we have taken the necessary action and that a platform has been established from where the company can move forward again."
Compass said earnings per share, before goodwill amortisation and exceptional items, are expected to be around 19 pence.
Turnover is expected to grow by around six per cent on a like-for-like basis, while underlying operating profit is expected to be around £710 million, the company added.
Investec Securities analyst Robert Morton described the trading update as a "mixed bag with disappointing trading offset by news that management is changing and that the Continental travel operations are to be sold".
He added: "The restructuring and change in management could herald the turn in the group's fortunes, although disappointing trading could hold back the shares in the short term."