Catering giant Compass took a swipe at the negative publicity about the standard of UK school meals yesterday as it unveiled a 9.9 per cent fall in annual underlying profits.
Compass labelled its UK performance during the year to September 30 as "unsatisfactory" after revealing that like-for-like sales to schools were one per cent down.
Operating profits in the UK were down by a third at £205 million, even though turnover was six per cent higher on a like-for-like basis. The UK accounts for roughly a quarter of the £12.7 billion of revenues generated by Compass worldwide.
Compass said: "Most contract caterers in the education sector have been impacted by declining participation during the year following recent negative publicity regarding the standard of school meals."
Much of the criticism came from celebrity chef Jamie Oliver.
It also counted the cost of the London bombings on its travel concessions business at railway stations in the capital, including the Upper Crust sandwich chain which was put up for sale in September.
Trading elsewhere in the world was in line with its hopes, but Compass confirmed that an investigation into how United Nations contracts were awarded was continuing to cast a shadow.
Three staff members, including the chief executive of its UK operations, have already been dismissed after an inquiry led by law firm Freshfields raised "serious concerns".
"The investigation is ongoing and, as yet, no final conclusions have been reached," the company said.
The allegations concern Compass's Eurest Support Services.
Compass has said it is restructuring the management of ESS.
Eurest is part of a powerful presence across the Midlands which also includes Medirest hospital catering, Scolarest schools catering operations and Moto motorway services.
Eurest, which has offices in Birmingham and Leicester, oversees food service contracts for clients that include Nottingham-based Experian and Centrica in Solihull.
In the period between October 1, 2004 and September 30 this year, it picked up £6.5 million total turnover of new and retained business across the region.
Each day, 1,361 Eurest employees cater for the needs of tens of thousands of workers across the Midlands, at locations ranging from major manufacturing sites to company boardrooms.
Eurest's managing director for England and Wales, Andy Harris, said a number of high profile contracts had been secured, together with a solid rate of retention and extension of existing business.
"On the basis of this strong performance and with more
7.9 per cent. companies realising the benefit of outsourcing, we expect our business to expand further over the next six months," he added.
Compass's profit before tax, amortisation and exceptional items dipped to £581 million for the year to the end of September, from £645 million the previous year.
Updating investors on how the sale of its concessions business was progressing, Compass said information packs had been sent out and a deal should be completed by the middle of next year.
The business includes Whistlestop, Harry Ramsden's, Millie's Cookies as well as Upper Crust and generated revenues of around £1.8 billion last year.