Rentokil profit attacked in new shouting match
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The shouting match between the two sides to the pounds 1.9bn bid battle for BET continued yesterday as pressure grew for a higher offer from Rentokil.
The new hostilities came as Fidelity International, once one of BET's biggest shareholders, revealed that it had reduced its stake to 1.09 per cent. The fund management group, which owned 7 per cent of BET a year ago, has been steadily reducing its stake. With the latest sale, it has cut its stake from just under 5 per cent to just over 1 per cent in the space of six weeks.
In a shot aimed at debunking Rentokil's past record, BET claimed profits growth at the pest control to potted plants group was well below the much- vaunted aim of 20 per cent a year. Stripping out foreign exchange benefits, profits on the sale of fixed assets and the use of previously established acquisition provisions, pre-tax profits rose by just 16.9 per cent last year, BET said.
Rentokil's latest report and accounts, from which the figures were culled, also "catalogues disappointing results across a wide spread of Rentokil's businesses", BET claimed.
John Clark, chief executive, said: "The slowdown shown by Rentokil's report and accounts vindicates our view that Rentokil needs BET. As we have always said, this ill-conceived offer seems to be a desperate attempt by Rentokil to use BET's superior growth to maintain its own targets at BET shareholders' expense."
But Rentokil hit back last night. Clive Thompson, chief executive, said: "We think this is the last knockings of a tired and flagging management team. Our view is that the time for a company doctor [at BET] is over ... It is time now to pass the company over to a management specialising in the industrial services business."
Mr Thompson said the adverse comments in the annual report on 16 of its individual operations, highlighted by BET, was part of its practice of reporting fairly on the performance of the group's businesses.
Given that there were over 200 such businesses in the group, they were "barely much reflection of the total", he said.
Meanwhile, referring to the pounds 7.5m of one-off items picked out by BET as inflating last year's profits, Mr Thompson said the other side had failed to refer to similar items in 1994, when exchange rates had been adverse and fixed asset disposal profits had been lower. These were actually "continuing items which occur every year", but stripping them out of both sets of figures he admitted the underlying growth rate was still just under 19 per cent.
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