The chief executive of Elior UK, the UK's fourth-largest contract caterer, has slammed his company's efforts to hit its financial targets.

In an internal e-mail to senior managers obtained by Caterer, Mike Audis said two-thirds of UK profit centres had submitted operating profit for June that was "significantly adverse to forecast".

Audis also warned that profit targets for this year and the start of next year were unlikely to be met, describing the prospect as "intolerable". He said: "An analysis of recent performance indicates that the current run rates, of overheads and operating profit, will not allow the budget to be achieved in period one of the (next) budget year."

The difficulties have come at a bad time for Elior UK, which runs about 800 contracts and is estimated to turn over about £250m. French parent company Groupe Elior is poised to return to private ownership under Holding Bercy Investissement, the investment vehicle owned by group chief executive Robert Zolade.

A City source said: "The UK business is not a huge part of what the group does but it's something the new private owners will want to see resolved."

An Elior spokesman described the e-mail as a "robust rallying call to senior managers" that was designed to "keep them ruthlessly focused on meeting 2006 targets".

He denied the company was struggling to win business. "Elior UK is in very good shape, with revenues significantly up over the past year and some very big contract wins, but, as you would expect, we are always looking at how we can improve profitability as well as top-line growth."

Food service consultant Chris Stern said the poor figures might be down to image rather than substance. "I rate what it does but it's no surprise that it's struggling," he said. "It doesn't have a clear image in the marketplace and can often fall down the crack between the
big boys and the medium and small players."

By Tom Bill

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