CLEANING and pest control firm Rentokil Initial missed third-quarter profit forecasts yesterday and said it was unsure if its struggling City Link delivery business would return to profit in its key Christmas period.
Rentokil, which offers services from hiring work uniforms and tropical plants to catering and security, posted an adjusted pre-tax profit of £53.1m for the period, 7.3 per cent down on last year, and below a market consensus of £57.4m.
Revenue was up 2.4 per cent to £637m. Growth across most of its divisions was dampened by an increased operating loss at City Link, which rose to £6.8m from £1.3m due to lower prices and more competition.
The division has dragged on group profit for some time, hampered by lost contracts and poor operations during Britain’s record cold snap last winter.
“We are not yet clear that we are going to get profit in quarter four (in City Link),” chief executive Alan Brown said.
“A lot will depend on how trading goes over the next few weeks. I think we are definitely going to get revenue growth, whether we return to profit will really depend on how quickly we are able to make progress on our productivity agenda.”
City A.M. Reporter