Catering revenue took a hit at Initial Catering Services, part of Rentokil Initial, in the first quarter of the year due to the exit from a number of loss-making contracts and lower volumes.
The company, which operates Eden Foodservice in the school catering sector, said the introduction of nutritional standards for schools last September post Jamie Oliver had hurt operating profit also, with margins "considerably below" last year.
However, the company, which does not provide an individual financial breakdown for catering, said catering remained profitable in the first quarter ended 31 March.
In contrast in the same quarter last year the company recorded a loss from its catering businesses, which also includes Autograph.
Initial added that initiatives to drive down operating costs, including the use of e-auctions for food procurement, were being introduced.
Paul Daly, previously with Sodexho, was installed last month as managing director of Initial Catering Services, which sits within the group's Initial Facilitates Services.
Turnover at Initial Facilitates Services for the first quarter was 11.5% up year-on-year at £143m (2006: £128.2m). Operating profit leapt 30.7% to £9.8m (2006: £7.5m).
By Chris Druce
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