RENTOKIL Initial has unveiled plans to fix its UK pest control business – after poor service cost it several key customers.
The firm said UK pest control sales plunged by 15.2% in the first quarter compared to last year – with customer retention rates falling from 81.9% to 72.1%.
Rentokil, set out a six-point plan for the recovery of the division, and said it was already improving performance.
The company said its City Link parcels arm also suffered a decline in sales – down 10.7% on the year. Rentokil saw profits halve last year.
In its latest results, the company posted adjusted pre-tax profits of £16.5m, down 18.7% on the same period last year.
Chief executive Alan Brown said the first quarter had seen “further progress” in the firm’s turnaround plans.
Said Mr Brown: “Strong focus on service, cost and cash has enabled us to deliver profit slightly ahead of expectations despite tough trading conditions in the UK and US. Service levels have improved further and cash generation has been excellent.”
Mr Brown predicted the firm would see profit growth in the third and fourth quarters, but warned: “The turnaround is still at an early stage in market conditions that remain challenging.”
He said the UK pest control business had seen a long-term decline in revenue, profit and market share, driven by a lack of investment and poor service.
Ideas for changing the division’s fortunes included management changes, focusing on a series of quick business wins to generate cash and improved customer relations.
Revenues for the group in the three months to March 31 were down by 1.2% at £584.2m when measured at constant exchange rates.
