French catering giant Sodexho has released a set of financial results that surprised the City and cited an improvement in UK performance as a major contributory factor.

The second biggest catering operation in the world unveiled year-end figures showing net income for the 12 months to August 31 at £128.5 million, a rise from £113.8m in the previous year.

This was significantly better than had been expected by analysts who had forecast a marginal increase at best after Sodexho had revealed a 1.6 per cent decline in turnover, to £8.1 billion.

Operating profits in the UK and Ireland soared by 35 per cent to £19.7m, buoyed by contracts struck during the year with HBOS, the Scottish Parliament, Stoke Mandeville Hospital and Colchester army garrison.

Sodexho believes it can follow up these results with another good performance in the next 12 months and predicted a net profit increase of between seven and eight per cent.

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