Rentokil, which has businesses ranging from textile and washroom services to rat-catching and tropical plant rental, said profit for the three-month period to the end of September 2006 was £73.4million as revenue rose by 13.7% to £520.8million.
“Our performance in the third quarter reflects continued difficult markets in European textiles and washroom services, and the on-going re-engineering of the UK washroom business,” said Doug Flynn, CEO of Rentokil Initial. “We expect that the group will return to modest profit growth in 2007.”
The UK business suffered from the loss of customers who had also been users of the now-closed textiles business; year-to-date, the loss was put at some £2million.
Revenue for the year-to-date was £1.5 billion, 11.6% above the same period last year, but margins had been affected by acquisitions and by a one-off pension curtailment payment of £14.7million.
In August, Rentokil had recorded first half pretax profit of £112.1million and warned that profits at its biggest unit, textiles and washroom services, would fall short of forecasts this year in tough trading conditions.
According to Rentokil, trading conditions in the European business continued to be challenging. All major continental markets achieved revenue growth with the exception of the Netherlands. Revenue growth was under 1% in France and Belgium with Germany performing little better than this. However some of the smaller markets such as Spain, Portugal, the Czech Republic and the Scandinavian countries recorded stronger revenue growth.
Announcing its latest results, the company also confirmed that its French textiles business, Initial BTB SA, is the subject of a regulatory inquiry by the French Competition Council. “Rentil Initial's policy has been and remains to conduct its business in full compliance with all applicable competition laws. BTB intends to co-operate in all respects with the Council's inquiries.”
