Rentokil stuns City with good numbers

Rentokil Initial today delivered better-than-expected profits and announced a shake-up of its pest control business in the UK.

The firm, dubbed the Royal ratcatcher for work done at Buckingham Palace, said profits were up 16.1% to £21.6 million in the first three months of the year. The City was expecting £17.5 million.

However, chief executive Alan Brown admitted the uplift was mainly down to the strength of the euro against the pound. About 80% of Rentokil's earnings are in euros.

Brown also launched a recovery plan for the UK pest control business after years of poor performance.

"UK pest operations lost focus on its customers and was delivering, frankly, a very poor service for a period of at least two years and probably longer than that," said Brown. "The first thing to do is get the service right on the ground."

Rentokil shares have risen 48% over the past three months on recovery hopes although Brown warned much depended on the state of the economy.

"We are not seeing any green shoots but nor are we seeing Armageddon," he said.