Rentokil posts profits fall

Pest control-to-hygiene group Rentokil Initial kept faith in its recovery plan today despite posting a sharp drop in annual profits.

The group expects the deterioration in trading to continue in the first part of this year before benefits come through from investments in sales and IT and management changes to address Rentokil’s “stifling and bureaucratic” culture.

The need for an overhaul – overseen by chairman Brian McGowan and new chief executive Doug Flynn – was reflected in annual results showing bottom-line profits of £297.8m (€428m), against £396.8m (€570.2m) for 2003.

Stripping out exceptional costs, Rentokil said its underlying profits figure of £347.2m (€499m) came in marginally ahead of market expectations.

In the company’s biggest division of hygiene, turnover grew 1.3% to £995.4m (€1.4bn) but operating profits fell 13.9% to £247.5m (€355.6m).