Pest control and cleaning firm Rentokil posted a 15 per cent rise in full-year pretax profit and said it will focus on improving its struggling City Link business in 2011.
The company, which provides textiles and washrooms services, parcel deliveries and tropical plants, said on Friday adjusted pretax profit had risen to £192.3m after strong performances in pest control and facilities services, as well as in the Asia Pacific region.
A consensus forecast supplied by the company said it had expected Rentokil Initial to post full-year pretax profit of £193m
Rentokil said courier service City Link's structural issues were largely resolved but its poor operational performance was compounded by cold weather conditions that hit Britain over Christmas.
The company also said Benelux's poor performance had been impacted by weak operational control and severe price competition.
Rentokil said in order to improve performance at City Link, whose managing director Stuart Godman resigned in December, it would implement a turnaround plan which included investing in customer care, increasing the number of employed drivers and making cost savings of £60m.
"City Link's operational inefficiencies are expected to be addressed by October 2011 but financial delivery will be weak until then," said Rentokil chief executive Alan Brown in a statement.
Shares in the company closed at 98 pence on Thursday, down nearly 17 per cent from a year ago, giving the business a valuation of around £1.8bn.
City A.M. Reporter