Compass, the largest caterer in the world, said the strong pound will take a £1.2 billion bite out of its revenues for the year to September 30.
The company, which provides meals for schools, work canteens and major sporting events such as Wimbledon, expects sterling's strength against most of the key currencies it trades in to have a 6.7% impact compared with 2013 results and to lower operating profits by 7% or £89 million.
Excluding the currency impact, Compass forecasts sales growth of 4%, partly due to a strong fourth quarter performance from its US and emerging markets businesses and continued improvement in Europe and Japan.
Shares rose almost 2% as brokers at Shore Capital held their forecast for pre-tax profits of £1.1 billion on November 26, down 3.3% on a year ago.
Analysts at Numis Securities added: "Compass has reported another good performance in the fourth quarter and a very solid pre-close update."
In Europe and Japan, it said it had completed the exit of a number of contracts as a result of a 2012 cost cutting programme, adding that although volumes are still negative they are falling at a slower rate.
It expects an overall sales decline in the year in these markets of 1.5%, half of last year's rate.
But in the US the group said it saw strong growth in the first half of the year, accelerated in the second half by new business wins and contract retention.
The US market showed good growth in the healthcare and the sports and leisure sectors, meaning the group expects to see organic sales growth of around 6.5% from North America.
Compass forecasts 8% growth from emerging and fast growing markets.
It said growth in these markets was good due to a large-scale shift towards outsourcing, although there had been a softening in volumes in some markets such as the Australian offshore and remote sector in the second half.
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