Pest control firm Rentokil Initial Plc (RTOKY.PK,RTO.L) Monday reported a lower first-quarter profit, reflecting an increase in re-organization costs and one-off, despite rise in revenues. The firm also announced the disposal of the entire share capital of City Link Ltd., parcels business to BECAP12 Fund LP. The shares rose about 5 percent in the morning trade on the London Stock Exchange.
Rentokil said it has retained its previous guidance for the full year, despite tough trading conditions in Continental Europe.
According to the company, Continental Europe has become more challenging, with strong pricing pressure particularly in flat linen. However, restructuring is progressing in Rentokil's three major workwear markets of France, Benelux and Germany, it said.
The firm also announced the disposal of the entire share capital of City Link Ltd., which will enable Rentokil to concentrate on its core international businesses in pest, hygiene and workwear. Alan Brown, chief executive of Rentokil stated that City Link parcels business has now turned the corner after five years of substantial losses.
In an interim management statement, the company said its profit before tax for the first quarter declined to 10.6 million pounds from 12.2 million pounds in the previous year. Re-organization costs and one-off for the period totaled 10 million pounds, up 69.5 percent from a year earlier.
On an adjusted basis, profit before tax was 25.1 million pounds, while the company posted 22.8 million pounds in the prior-year quarter.
Revenue for the quarter rose 3.3 percent at actual exchange rates to 644.8 million pounds. At constant exchange rates, the growth was 2.7 percent.
In a separate release, Rentokil Initial announced the sale of City Link to BECAP12 Fund LP or Better Capital, a private equity investor, for 1 pound. There are no outstanding conditions required, so completion is effective immediately. The firm said it will take an exceptional charge of about 40 million pounds with its second-quarter results.
The current City Link management team, led by David Smith, will continue to run the business. Better Capital will invest 40 million pounds in the business to provide more than sufficient funding required by City Link to complete its turn-around plan. The gross assets of City Link as at December 31, 2012 were 77.6 million pounds.
RTO.L is currently trading at 101.3 pence, up 4.65 pence or 4.81 percent, on a volume of 4.47 million shares.
For comments and feedback contact: editorial@rttnews.com
Business News
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.