COMPASS Group, which employs nearly 400 people in Hampshire alone, has had to stomach a half-year profits slump.

The business and industry caterer capped a disappointing first-half performance with a 7.8 per cent drop in pre-tax profits, sending its shares down six per cent, or 13p, to 223p.

Chief executive Michael Bailey, ordering a business review, said: "I am not happy with our recent performance. We need to respond more rapidly than we have to the changes taking place in our market."

A £50m cost-cutting plan over 18 months is now under way to reduce overheads.

Compass - the world's largest foodservice organisation - has a powerful presence across the south, with 317 contracts. Its business divisions locally include Eurest workplace catering, Medirest hospital catering and the Scolarest schools catering operations.

Half-year turnover was £6.2 billion (2004: £5.8 billion) with like-for-like growth of six per cent, in line with expectations.

Joining Compass at the top of the Footsie fallers board were two other companies with a big presence in Hampshire.

Supermarket chain Sainsbury's lost 5.5p to 282.25p after unveiling a 62 per cent slump in annual profits to £254m.

Clothing giant Next was also faring poorly - down two per cent or 30p to 1475p - after reporting a 3.2 per cent retreat in like-for-like sales over the past 15 weeks.

Like-for-like sales are watched like hawks by investors, as they are a useful measure of whether a company has grown its sales compared to the previous year.