Rentokil revenue down in Q1 results but shares still up for the year

Shares in business services group Rentokil Initial (LON:RTO) dropped today after it released its first quarter trading update signalling a 3.7 per cent loss in revenue. But despite the shares being down as much as 4.67 per cent today, putting the group at the top of the FTSE 250 fallers, Rentokils stock has risen 15 per cent in the year to date.

Rob Hull
shareprices.com - Friday, April 30, 2010

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Rentokil Initial shares are down today, but stil up for the year-to-date

Rentokil Initial, which has pest control, courier service, cleaning and building service operations under its banner, announced a drop in revenue to £607.3m – a 3.7 per cent loss based on constant exchange rates.

The group put the loss in revenue down to collective losses for Facilities Services, Asia Pacific, Textiles and Washrooms and Ambius on last year due to ‘challenging market conditions across their countries and operations’.

And despite an increase in profits of 41 per cent to £30.4m aided by an effective cost cutting scheme, there was little to inspire investors today.

Shares fell 1.43 per cent by the time the market opened today, and after midday have continued to fall to a low price of 126.70p.

Rentokil CEO Alan Brown said: “We remain focussed on our growth agenda and our pilot studies are now underway.

“We expect revenue to improve as the year progresses and for continued profit development.”

The group will look to increase revenue and profit by continuing restructuring programmes in City Link and Textiles and Washrooms.

Restructuring cash flows are expected to be in the region of £50m in the year end results and the group said it will continue to target ‘modest growth’ for 2010.

Rentokil stocks might be down today but they are outperforming the FTSE All Share index by nearly ten per cent.

 

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