Shares in Rentokil Initial took a dive on the FTSE 250 in morning trading after the group reported a sharp decline in pre-tax profit in the full year ended 31 December 2010.
Revenue fell in the period by 1.4 per cent to £2.5 billion, while pre-tax profit declined 77.7 per cent to £14.5 million.
The group said that it had just brought its net debt below the one billion mark and that it was considering the resumption of a dividend, pending on a review of its City Link and Textiles & Hygiene Benelux businesses.
Alan Brown, Chief Executive Officer of Rentokil Initial, said, "A little over half way in to our five-year turnaround plan the group has undergone considerable and, in most cases, successful structural change. Good progress has been made in customer service evidenced by continued improvement in customer retention on our contract business. Cash delivery has also been excellent. Nevertheless, much remains to be done on customer care and on capability development.
"In the coming year we anticipate continued good progress in Pest Control, Facilities Services, Asia Pacific and Ambius. City Link's operational inefficiencies are expected to be addressed by October 2011 but financial delivery will be weak until then. Textiles & Hygiene Benelux controls have improved and pricing pressures have reduced but the recovery plan is at an early stage of development.
"Programme Olympic is performing well, driving capability in growth, customer care and administration. We expect these initiatives to deliver organic revenue growth in our contract businesses during the second half of 2011."
By 11:35 shares in Rentokil Initial were down 7.04 per cent on the FTSE 250 to 91.10 pence per share.