£1bn (€1.47bn) price tag expected for UK food outlets

UK food outlets serving millions of customers at airports and railway stations were put up for sale today with a price tag of £1bn (€1.47bn) mooted in the City.

Brands such as Harry Ramsdens, Upper Crust and Ritazza were included in the travel concessions business being offloaded by catering giant Compass.

Their sale was announced as Compass rocked the Square Mile with news that its annual profits would again fall short of hopes, and said its chief executive of the past six years was leaving.

Shares fell nearly 9% to wipe £450m (€661m) off the value of the world’s largest catering firm, which supplies lunchtime meals to about 2,500 schools and has contracts with corporate clients including the BBC.

Compass said it would only muster pre-tax profits of about £580m (€851m) for the year to September 30, compared with consensus expectations of £621m (€912m) and a haul of £654m (€960m) in 2004.

Analysts welcomed news of the impending departure of boss Mike Bailey, but said his successor faced the challenge of reviving the firm’s struggling UK arm.

Mr Bailey has been heavily criticised over the past year, which has seen the group issue two profits warnings and its shares fall to an all-time low.