Rentokil slowed by City Link woes

Rentokil Initial unveiled a further restructuring of its ailing City Link operation today after the delivery arm slumped to another loss.

The support services company will shut the operation’s head office in Camberley by April and move jobs to Heathrow, as well as launch investment in new call centre, route optimisation and web programmes.

Rentokil described City Link’s 2010 performance as particularly disappointing as December’s severe weather added to ongoing operational failings. Losses in the final quarter reached £3.6m (€4.3m) and meant the deficit for the year widened to £9.6m (€11.4m), from £5.6m (€6.7m) in 2009.

The new improvement programme will be in place by October but Rentokil warned of another disappointing financial performance from City Link until then.

The company said: “Significant management change has taken place and a detailed operating plan is now being pursued which should deliver substantial operational improvement prior to the Christmas seasonal peak.”

Despite the poor performance at City Link, Rentokil still announced that group-wide profits increased 15% to £192.3m (€229.5m) in 2010 while sales were down 1% to £2.5bn (€2.9bn).

Rentokil chief executive Alan Brown said Rentokil was half way into a five-year turnaround plan that has, in most cases, shown successful structural change.

He reported strong profits growth in pest control and facilities services, with earnings up 10% and 21.6% respectively.