Rentokil first quarter profits down

Source: Supply Chain Digital

Date :02/05/2008 12:13:29

Rentokil Initial Plc today reported that its first quarter profit has fallen as the company experience continuing problems with City Link which has impacted group financial performance.

Profit before income tax from continuing operations fell to £5 million compared to £23.6 million in 2007. Profits have plunged in the first quarter 79 pence, and the company is to cut the dividend for the first time in at least 19 years.

Operational problems

The City Link management team has made some progress in addressing operational problems, Rentokil said. Service levels have shown strong signs of improvement whilst a seven point plan has been put in place to improve customer service, develop integrated information systems and optimise hub and depot networks.

Alan Brown, Chief Executive of Rentokil, stated, “We have outlined our plan to restore City Link to operational and financial health but returning the business to its former levels of profitability is likely to take some time.”

He added, “The group agenda is now to focus on operational excellence and efficiency, with improvements in customer service being the primary indicator of success in the short-term.”

Rentokil Initial Plc is Britain’s second-largest parcel-delivery company following the purchase of Target Express. Last month they won a parcel-delivery contract with Amazon.com.

May 2, 2008