Failure to retain enough contracts led to a 5.6% drop in underlying sales at Sodexho UK & Ireland during the 12 months to 31 August, the company said today.
Turnover dropped to €1.35b (£931m), down from €1.45b (£1b) the previous year and €1.69b (£1.2b) the year before that.
Sodexho said: "It was mainly the business and industry segment that affected the change in revenues.
"This is explained for the most part by our exit from the hotel sub-segment and by a retention rate that is too weak."
But the company added: "Our focus on restoring the profitability of this subsidiary was nonetheless accompanied during the last few months by some commercial successes with Dell in Ireland, British Aerospace, HBOS, and the Havering, Roehampton and Stoke Mandeville Hospitals in Great Britain."
Worldwide, Sodexho reported underlying "organic" sales growth of 4.1%, despite a 1.7% drop in the headline sales figure to €11.5b (£7.9b).
The drop came as the result of fluctuations in currency exchange rates as overseas revenues were converted into Euros.
In North America, sales grew by 3.7%, in continental Europe by 4.7% and in the rest of the world by 17.7%.