Flight services group Alpha Airports yesterday said the cost of expanding its business had caused annual profits to fall nearly 13 per cent to £18.9 million.
Alpha, which supplies inflight catering and retail services at airports, said start-up losses on some new businesses and investments it had made in flight services to improve growth had caused the decline in profits before goodwill and one-off costs in the year to January 31.
The group said new contracts won by its expanding Australian flight catering operation had resulted in significant initial costs.
A delay between the start of an American Airlines contract and the loss in September of an Air Canada deal also led to extra spending.
However, it said sales had lifted by more than ten per cent year-on-year due to growth at the UK's regional airports and the ongoing recovery in long haul traffic.
Chief executive Kevin Abbott called the profits fall "disappointing", but said he believed the group's investment would bring better growth and performance in the near and long term.
Alpha operates from more than 150 shop and catering outlets at 74 airports in 13 countries worldwide.
Airports served include Manchester, Glasgow, Gatwick, Aberdeen, Belfast and Bristol. The group, based at Cranford, Middlesex, also began serving food to customers on Eurostar trains in September.
It said its UK flight services business saw 2.1 per cent growth in meals served and maintained its market share despite the loss in the second half of the Air Canada contract.