PEST control-to-hygiene firm Rentokil Initial said first-half profits slumped by more than half as it battles to revive its ailing City Link business in a worsening economic climate.
The firm, which has issued four profits warnings since December, said its troubled delivery arm had stabilised but warned losses would continue for the rest of the year.
The economic slowdown is also hitting its UK pest-control business – with fal
ling revenues in June and July and enquiries tailing off in recent weeks – with further issues in its washrooms division.
Chief executive Alan Brown – one of a trio of former ICI bosses drafted in to turn around Rentokil in March – said: "We have a lot to do and will have to deliver it in increasingly difficult economic circumstances."
Rentokil said underlying pre-tax profits had fallen by 55 per cent to £39.3 million in the six months to 30 June.
The group, whose businesses range from rat catching to tropical plant hire, said trading in its textiles and washroom businesses had deteriorated in the second quarter, while City Link remained significantly loss- making. It added that profit before tax, goodwill and one-off items was likely to be £35m for the full year, down from analysts' previous consensus forecast for £151m.
It said it was unlikely profitability would improve this year in its UK business, adding it remained cautious about trading conditions across its continental European operations.
Founded in the 1920s to sell a new rat poison, Rentokil has been battling stiff competition over the past few years and has sold its electronic security, guarding and conference units in a bid to focus on more profitable businesses.
The full article contains 289 words and appears in The Scotsman newspaper.
