More change at loss-making City Link

Rentokil Initial announced a further restructuring of its ailing City Link operation yesterday after the delivery arm slumped to another loss.

The support services company will shut the operation’s head office in Camberley, Surrey, by April and move jobs to Heathrow, as well as launch investment in new call centre, route optimisation and web programmes.

Rentokil described City Link’s 2010 performance as particularly disappointing as December’s severe weather added to ongoing operational failings. Losses in the final quarter reached £3.6m and meant the deficit for the year widened to £9.6m from £5.6m in 2009.

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The new improvement programme will be in place by October but Rentokil warned of another disappointing financial performance from City Link until then.

Despite the poor performance at City Link, Rentokil still announced that group-wide profits increased 15 per cent to £192.3m in 2010 while sales were down one per cent to £2.5bn.

Chief executive Alan Brown said Rentokil was half way into a five-year turnaround plan,