Britain's best-known pest control business, Rentokil Initial, saw its profits plunge by more than 50% over the first half of the year, casting a shadow over the group's recovery hopes following four profit warnings since December.
The group, which once earned the title of "Royal Rat-catcher", said that improvements in the business are being slowed by more difficult economic conditions and warned that the current rate of losses would continue for the remainder of the year.
Pre-tax profits for the six months to end June plummeted by 55% to £39.3m and the interim dividend has been cut to 0.65p a share, down from 2.13p - a fall of 70%. The firm cited a downturn in pest control in the UK and US as well as deterioration in its parcel delivery, textiles and washroom services as reasons behind the profit fall.
The grim results follow a profit warning last month - their fourth in seven months - which sent shares diving by 30%.
The group, whose business ranges from pest control to catering and conferencing, blamed botched acquisitions and "poorly-executed" business restructuring.
Rentokil's parcel delivery business, City Link, stabilised, although revenue in the first half was still down by 5.8%. Operating profit in the first six months of the year was just £41.7m compared with £102.8m during the same period last year.
City Link plunged into the red in April this year and the company predicted that the business would make a full year loss of up to £40m.
At the end of the first quarter, City Link had overdue debts of £14m. Brown said that this has been halved but there was still more progress to be made. The firm's washroom and Australian operations were also in a similar dire state and there has been little improvement, Rentokil said, although they saw the situation starting to turn around.
"Recovery will take time, UK businesses (are being) slowed by more difficult economic conditions," said Alan Brown, who was parachuted in as chief executive in March alongside two other executives from chemicals group ICI.
"We have made a solid start with strong improvement in customer service over the past four months, but we are on a three to five-year journey to profit recovery. Our underlying strength is that we have generally attractive market positions and our great opportunity is that we have room for improvement almost everywhere."
Brown said that the biggest focus would be on poor management programmes and improving customer service. The company also hope to make cost savings and improve productivity of workers.
"We're still a profitable business," Brown said. "But the level at the moment is unsatisfactory, our 5% operating margin certainly should be back in the double digits in the long term if we are to fulfil our aspirations."
In July, the group warned that profits before tax would be £116m this year - £35m lower than forecast in May.
Once one of Britain's most successful companies - with former boss Sir Clive Thompson dubbed "Mr 20%" for his ability to keep the conglomerate growing every year - Rentokil has come under severe pressure this year to break itself up.
But Brown maintained that this was not in the best interest of shareholders and insisted the company should be given several years for improvements to be made.
Shares in Rentokil slid by 7.75p or 10.5% to 66.75p in early trading today. They have underperformed the UK support services sector by some 25% since the beginning of 2008 and lost 40% in the year to date.