Cost-cutting improves figures at Rentokil

Pest control to delivery firm Rentokil Initial said cut-throat competition across several markets had squeezed sales despite cost-cutting moves boosting profits.
By The Newsroom
Published 30th Jul 2010, 23:28 BST
Updated 30th Jul 2010, 23:28 BST

Yesterday the firm reported tough conditions across most markets – particularly continental Europe – with "continued strong pricing pressure in a number of categories".

Rentokil added cost-slashing plans were running ahead of its 75m target for the full year, with 40m in supply chain savings and redundancies across the group made during the first half.

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The group, which employs 68,000 people worldwide, shed 250 jobs with the closure of a delivery hub for its City Link parcels business at Wednesbury in the West Midlands.

The savings pushed up underlying pre-tax profits 39 per cent to 77m although first-half revenues were down 2.3 per cent to 1.23bn.

Former ICI boss Alan Brown was drafted in more than two years ago to lead the revival of the firm after recession and a botched expansion under previous management plunged City Link into the red.

The new management team is also charged with reviving its pest-control and washroom businesses in the UK and Australia under its Programme Olympic recovery plan.

Rentokil said customer retention rates across the firm were improving, while City Link narrowed its operating losses by 2.3m to 4.7m.

The pest control business grew sales 1.1 per cent to 220.

Related topics:EuropeWest MidlandsWednesburyICIAustralia