BUSINESS services company Rentokil Initial today announced that it has sold unprofitable delivery firm City Link to a private equity investor for £1.
City Link posted operating losses of £31m in 2011 and £26m in 2012. However, in the first quarter of 2013 the company posted an operating loss of £8.1m, an improvement of £4.6m against the first quarter of last year.
“I believe City Link has now turned the corner after five years of substantial losses,” said chief executive Alan Brown.
“The business has made strong financial progress over the last two quarters, it now has a strong management team and we have found a very committed investor in Better Capital.
“Rentokil Initial has decided to divest of City Link at this stage of the turnaround so that we can concentrate on our core international businesses in pest, hygiene and workwear. The sale positions Rentokil Initial as a stronger and more focused group.”
Private equity investor Better Capital will invest £40m to turn around the business.