Half-year results from pest control group Rentokil Initial (RTO) aren't as weak as the reported figures suggest. In fact, adjust for £26.9m of one-off restructuring-related charges and half-year adjusted operating profit rose 5.2 per cent to £112.6m - helped by a strong acceleration in second-half profit growth. However, European conditions remain tough and more time is needed for the turnaround programme to work through.
Part of that programme involves reshaping Rentokil into a more focused business and the disposal of loss-making parcel service City Link during the period went some way towards achieving this - although that move did generate a £39m disposal loss. Meanwhile, Rentokil's operational performance has been hit by eurozone weakness. Underlying sales in the group's key Benelux markets, for example, fell 7.5 per cent in the period to £126.8m, while revenues in France and Germany were largely flat at £183m and £101m, respectively. This was partially offset by expansion into North America, where the acquisition of Western Exterminator boosted revenues there by 46.9 per cent to £168.1m. Management said it expects that growing momentum to be maintained into the second half.