Food services and facilities management company Sodexo has reported sales growth but also the loss of "significant" defence contracts.
In its financial results filed with Companies House to 31 August 2017 for its UK and Ireland business, Sodexo reported a 3.3% sales increase to £1.24b, driven by new business within the public sector, £9.8m of which was from acquisitions.
However, the company also reported that its retention rate has reduced from 96.9% to 90.2% mainly due to the loss of "significant contracts" in its defence business. Its operating profit decreased by 22.5% to £55.4m.
Sodexo's operating margin has also been squeezed, decreasing from 6% to 4.2%. The business said while margins on new business remained attractive, "performance reflects existing contract demands and continued market pressures".
Turnover increased slightly from £1.2b to £1.23b; profit before tax was down from £78m to £64.1m.
On 11 September 2017 Sodexo acquired London contract caterer the Good Eating Company for £3m.