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James Ashton: Rentokil is still not sprung from its trap

James Ashton
Wednesday 14 August 2013 20:14 EDT
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Outlook Whenever Rentokil Initial says it is doing better, I smell a rat. This is a company that has flattered to deceive for as long as I have been writing about it. A glance at yesterday's figures shows that underlying revenues are falling, it is enduring tough times in Europe, and it is trying to put in place a more efficient country-by-country operating model. So what's changed?

In truth, this is a company engaged in activities with such low barriers to entry that anyone with their own mop or bucket could have a go. Aside from finally offloading the chronically poor performer City Link, what successive managements have failed to do is simplify the business or drive it into high-growth, high-tech markets. I doubt if Andy Ransom, the latest boss from the ICI production line, will do much better.

Rentokil is a company that activist investors really should get their teeth into. One of them nearly did eight years ago when Sir Gerry Robinson, the former Granada and Allied Domecq chief, tried to mount a coup. With the help of his Irish blarney, Robinson tried to persuade shareholders he should receive a chunky stake in the business for his turnaround efforts without putting in any of his own money. The attempt failed, but I wonder if the ratcatcher is any better off because of it.

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