Rentokil Initial’s bid to jump-start its City Link parcels arm took a further knock yesterday after it posted more big losses for the Christmas quarter.
The division racked up a deficit of £6.7m for the final three months of 2011, even though it delivered 8 per cent more goods and revenues rose 0.5 per cent.
Rentokil blamed the loss, which left City Link £31.3m in the red for 2011, on slow progress on cost savings initiatives and low productivity due to the need to meet its delivery targets over the key festive period.
A new management team is in place but Rentokil said it did not expect better results from City Link until the second half of this year.
The division’s problems offset better trading in areas such as pest control, textiles and facilities services, meaning Rentokil’s adjusted profits for the year fell 4.1 per cent to £184.4m.
The poor performance at City Link triggered asset write-downs worth £146m and meant the overall business recorded a full-year loss of £50.5m, against a profit of £14.5m a year earlier.