Rentokil in profits warning
Rentokil Initial today warned profits were likely to be £10m (€13.88m) short after weaker consumer spending impacted its City Link delivery arm.
Shares in the business services company slumped 13%, even though it said trading at its other divisions remained in line with expectations.
Rentokil said the usual pre-Christmas surge in volumes in City Link's business-to-customer sector had been later and less than expected.
It said it believed the slowdown in volumes was "a direct result of weaker consumer spending in a challenging retail environment".
City Link profits for the fourth quarter of the year are now likely to be up to £10m (€13.88m) below its expectations, with a similar impact for the group as a whole. Panmure Gordon stockbrokers cut its underlying earnings forecast from £56.3m (€78.1m) to £46.3m (€64.27m) following today's announcement.
It said the update came as no surprise given guidance from the company in November and a further deterioration in economic conditions since then.
