Catering group Compass warned of a blow to profits after its Middle East division fed more peacekeepers rather than active military personnel.

The increase in the less risky and lower margin work - trailed in recent months by Compass - will leave a £15 million mark on annual profits.

Compass did not detail the contracts in question but said the "evolving nature" of the business made accurate forecasts difficult.

It is the second time the company has warned on profits after a shock alert in September caused it to lose around a quarter of its market value.

Shares were down almost six per cent on the stock market yesterday as brokers lowered profits expectations for 2005, in one case by £24 million to £620 million.

Updated: 10:33 Friday, April 01, 2005