PEST control and cleaning firm Rentokil Initial said profits halved last year after weaker performances at all but one of its divisions.
Rentokil’s City Link parcels arm and its UK washrooms and pest control businesses drove the poor result as profits slid by 48.5% to £107.9m.
The company said it would not be paying a final dividend in order to preserve cash.
Chief executive Alan Brown said it had been a challenging year for Rentokil but claimed a three-year plan formulated in October would help the business deal with some of its operational difficulties.
He predicted a substantial improvement at City Link during the second half of 2009 and said there had been a “remarkable improvement” in customer service at those businesses targeted for turnaround.
Mr Brown said: “We have developed a simple, robust, operationally focused strategy for the business which will over time produce substantial rewards. In the short term, however, trading conditions will be tough.”
City Link posted losses of £43.5m in the year, but Rentokil said the amount lost fell as the year progressed, culminating in a deficit of £4m during the final three months of the year.
Employee numbers at the division have fallen from 7,600 to about 6,600 in anticipation of decreased demand in the current economic climate.
Rentokil said the performance of its UK washrooms business had been hit by contract losses and “unacceptably high” levels of credits arising from poor service levels at the end of 2007. Revenues fell by 17.9% to £67.6m and the business made a loss of £5.2m.
Rentokil said a new management team had made progress in improving customer service levels.
The company’s Initial Textiles and Washroom Services division saw profits fall by 21% to £85.9m, despite stronger trading in continental Europe.
Rentokil Pest Control also saw poor trading in the UK, contributing to a 9% fall in profits to £59.7m.
