Catering giant Compass has announced that chairman Paul Walsh is to step down.

The FTSE 100 company confirmed a story first reported by Sky News, saying that Mr Walsh would leave "to focus on his other business interests".

He will remain as chairman until his successor is appointed and will not seek re-election at the company's AGM next year.

Mr Walsh has chaired the company - which is the world's largest caterer - since 2014.

One of Britain's most prominent businessmen, he was previously chief executive of Diageo, the FTSE 100 listed drinks giant.

City insiders told Sky News at the weekend that Compass was expected to consider internal and external candidates to replace Mr Walsh.

Compass has a market value of more than £30bn, making it one of the UK's biggest listed businesses, and employs roughly 600,000 people around the world.

It provides catering and hospitality services at events such as the Wimbledon tennis championships and the Cheltenham racing festival.

The company also supplies meals for schools, colleges and hospitals.

Confirmation that Compass is searching for a successor to Mr Walsh will have come as a surprise to the City, because he was widely expected to step down in 2023, when he would have served as chairman for nine years.

Shares fell by 1%.

Among Mr Walsh's toughest challenges as chairman of Compass was dealing with the tragic death of Richard Cousins , the company's chief executive, in an aeroplane crash in Australia two years ago.

Since appointing Dominic Blakemore as Mr Cousins' successor, Compass has continued to perform strongly, with its shares up 16% over the last year.

Unveiling full-year revenues of more than £25bn in November, Compass said it expected organic sales growth of around 5% in 2020.

It also warned, however, of plans to pare back operations in Europe, Brazil and Japan amid signs of economic weakness.