Rentokil delivery hit
PEST control and cleaning giant Rentokil Initial ruled out selling its struggling parcels delivery business City Link yesterday despite it once again dragging down group profits.
Chief executive Alan Brown said it was “unlikely” it would consider offloading City Link after blaming lower prices and intense competition for a widening in the division’s third quarter losses to £6.8million from £1.3million last time.
He said City Link, which has made a £24.6million loss to date this year and has been knocking group profit for some time, would “significantly” improve in the fourth-quarter helped by the Christmas parcels rush and new contracts.
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However this would depend on improved productivity, such as better route management and a new incentive pay scheme for its drivers.
City Link’s woes overshadowed growth in the group’s other divisions, such as textiles and hygiene and pest-control, to leave overall profits down 7.3 per cent at £53.1million. Revenues rose 2.4 per cent to £637million. Its shares tumbled 2½p to 66¼p.
Its work in Libya to catch rats to fight bubonic plague is “ready to go again” now the conflict there is over.
