Catering giant Compass (LON:CPG) saw shares sink over 2 percent at market open, after rising costs led to a 5 percent drop in profit in the first half of the year.

2018 first half pre-tax profit fell 4.7 percent to £792 million, with revenue down 0.8 percent to £11.4 billion. Its operating margin fell 10 basis points to 7.5, with operating profit also falling 2.7 percent to £853 million.

However, the group continued to perform strongly in the US, with constant currency revenue in the region rising 9.3 percent.

‘North America continues to make excellent progress with broad-based growth across sectors. Performance in Europe was mixed, with good growth in the UK, offset by subdued trading in Continental Europe,’ the firm said.

Sales in Europe increased by 0.5 percent, driven by good growth in the UK, with revenue in the rest of world growing by 3.4 percent.

Compass declared an interim dividend a share of 12.3 pence, up by 9.8 percent from the prior year. The company also confirmed its first quarter guidance, in which it said that it would be above the midpoint of its organic-growth target range of between 4 and 6 percent in the full year.

Shares in Compass group are currently trading down on the news, down 2.59 percent at 1,542.00 (0810GMT).