Trading Statement
Rentokil Initial PLC
04 May 2006
4 May 2006
RENTOKIL INITIAL PLC
FIRST QUARTER TRADING UPDATE FOR THE 3 MONTHS ENDED 31 MARCH 2006
£m
Q1 06 Q1 05 % change
Continuing Operations (1) - at 2005 constant exchange rates (2)
Revenue 535.1 488.5 9.5%
Operating profit (3) 60.8 71.8 (15.3%)
Adjusted operating profit (4) 64.3 72.8 (11.7%)
Profit before income tax (3) 50.4 62.1 (18.8%)
Adjusted profit before income tax (4) 53.9 63.1 (14.6%)
Continuing Operations (1) - at actual exchange rates
Revenue 539.5 488.6 10.4%
Operating profit 54.4 66.5 (18.2%)
Operating profit analysed as:
Operating profit (before amortisation of customer lists & exceptional items) 61.1 72.1 (15.3%)
- Amortisation of customer lists (5.4) (5.6) 3.6%
- Exceptional items (1.3) - -
Share of profit from associates (net of tax) 0.6 0.6 -
Net interest payable (11.0) (10.4) (5.8%)
Profit before income tax 44.0 56.7 (22.4%)
Operating cash flow 27.5 35.2 (21.9%)
Free cash flow (5) 13.8 16.8 (17.9%)
(1) All figures are for continuing operations and are unaudited and unreviewed.
The UK, Canadian and Belgian manned guarding businesses have been treated
as discontinued.
(2) Results at constant exchange rates have been translated at the full year
average exchange rates for the year ended 31 December 2005.
(3) Before amortisation of customer lists of £5.3m (2005: £5.7m) and exceptional
items of £1.3m (2005: £nil).
(4) Before amortisation of customer lists of £5.3m (2005: £5.7m), exceptional
items of £1.3m (2005: £nil) and items of a one-off nature of £3.5m (2005:
£1.0m). See appendix 4 for further details.
(5) Cash flow before acquisitions, disposals and equity dividend payments.
FIRST QUARTER HIGHLIGHTS
• Group revenue up by 9.5%; organic growth 4.3%
• Group portfolio up by 3.5% (including acquisitions)
• Operating profit and profit before tax in line with expectations,
impacted by one-off costs and planned organic investment outlined at
preliminary results
• Performance improvement initiatives progressing
• Outlook for 2006 unchanged
Commenting on first quarter performance and outlook, Doug Flynn, CEO, said:
'In the first quarter we continued to make progress in the performance
improvement initiatives which are underway across the group. There was evidence
in the quarter that these initiatives are working, with revenues increasing both
organically and through acquisitions. Nevertheless there remains much more to
do. The profit performance of the group, although down on last year, was in
line with our own expectations for the quarter and statements made at the time
of the preliminary results in February.
'The economic environment in some of our major markets remains unhelpful but we
must deal with the markets as they are, not as we would wish them to be. We
continue to expect that we will not achieve growth in full year adjusted profit
before tax before 2007 but that we will exit 2006 with a rising second half
trend.'
FIRST QUARTER OVERVIEW
Since the interim results in August 2005, we have reported on developments in
three areas of attention: strategy; people and structure; and operations.
Progress made in each of these areas during the first quarter of 2006 is
detailed below.
Strategy
Work continued in the first quarter towards our goals to achieve clearer
strategic focus and to build stronger strategic positions in our businesses.
The acquisition of J.C. Ehrlich Co. Inc. ('Ehrlich') was completed on 1 March
for a gross consideration of $141.8 million (£80.1 million). Ehrlich was the
largest independently-owned pest control company in the USA and the fourth
largest overall. Its operations are focused on the eastern seaboard and are
complementary to our existing US pest control operations. This key acquisition
gives us a solid platform for growth in the USA, which is considered to be one
of the fastest growing of the western pest control markets. Following the
acquisition, the USA is now our second largest pest control operation.
The intention to divest the manned guarding business was announced in February.
The activities in the UK and Canada were sold on 7 and 10 March respectively and
the Belgian activities on 21 April. The group continues to explore the possible
disposal of the remaining manned guarding business in the USA.
The buy-in of City Link franchises continued in the first quarter. Two
businesses with a combined annual turnover of some £31 million were acquired for
£10.5 million.
Five bolt-on acquisitions were made during the quarter for a total consideration
of £2.2 million. These were predominantly in the pest control and tropical
plants divisions.
The group launched a £300 million issue of notes under its EMTN programme on 21
March 2006. The notes carry a coupon of 5.75% per annum and will mature on 31
March 2016. The issue was aimed at progressively lengthening the group's debt
maturity profile and the proceeds were used to pay down bank debt.
People and Structure
Further senior management appointments were made in the quarter, most notably in
the pest control, tropical plants and Asia Pacific businesses.
A new long-term incentive programme for the group's most senior managers will be
put to shareholders at the annual general meeting on 18 May.
The corporate head offices at Felcourt and East Grinstead have relocated to new
offices in London and Gatwick.
Operations
Our priorities in the first quarter were to continue the implementation of the
detailed turnaround and performance improvement programmes. Progress is being
made in the projects across a broad front.
In January, the group announced that it would close the loss-making UK linen and
workwear operations on 30 April 2006. Detailed arrangements to assist customers
in finding alternative suppliers were mobilised and a consultation and support
programme was put in place for the 1,800 affected employees.
The UK washroom business was finally separated from linen and workwear during
December and this quarter was its first as a standalone business.
Implementation of the new Oracle ERP and CRM system - which will ultimately run
across the group - commenced during the quarter and is scheduled to be completed
in this business during the third quarter of 2006.
Sales and marketing efforts have been boosted in the pest control division with
the launch of www.rentokil.com on 1 March. This global landing page enhances
the online content of some of our major pest control businesses and provides an
e-presence for the first time for others. Early indications are that a
significant number of new business leads are being generated through this
medium. We have recently acquired www.initial.com which will be used to develop
the online presence of our Initial branded businesses in a similar fashion.
2006 OUTLOOK
Market conditions in our textiles and washroom businesses remain difficult in
some of the main European markets, particularly France, the Netherlands, Belgium
and Germany. Across the group as a whole, revenue growth and contract retention
are both expected to improve in 2006 and there was some evidence of this in the
first quarter. We continue to expect that we will not achieve growth in full
year adjusted profit before tax before 2007 but that we will exit 2006 with a
rising second half trend.
For further information:
Shareholder/analyst enquiries:
Andrew Macfarlane, Chief Financial Officer Rentokil Initial plc
Lisa Williams, IR Manager Tel: 020 7866 3000
Media enquiries:
John Sunnucks Brunswick Group
Jon Rhodes Tel: 020 7404 5959
A conference call for analysts and shareholders will be held on Thursday 4 May
at 9:00am. To join this call, please dial +44 (0) 20 7138 0818. A recording of
the call will be available for 14 days on the following numbers: UK - +44 (0) 20
7806 1970, USA - 718 354 1112. The passcode for both replay numbers is 3488126
#.
This announcement contains statements that are, or may be, forward-looking,
regarding the group's financial position and results, business strategy, plans
and objectives. Such statements involve risk and uncertainty because they
relate to future events and circumstances, and there are accordingly a number of
factors which might cause actual results and performance to differ materially
from those expressed or implied by such statements.
GROUP PERFORMANCE
Basis of Preparation
In all cases, references to operating profit are for continuing businesses
before amortisation of customer lists and exceptional items. References to
adjusted operating profit and adjusted profit before tax and amortisation (PBTA)
also exclude items of a one-off nature totalling a net cost of £3.5 million
(2005: £1.0 million) that, in addition to exceptional items and amortisation of
customer lists, have impacted the results for the period. These principally
relate to reorganisation and redundancy costs, associated asset impairments,
profit on the sale of land and buildings and professional and other costs in the
group centre. An analysis of these costs by division is provided in appendix 4.
All comparisons are at constant (December 2005) exchange rates.
Revenue for the group in the first quarter was 9.5% higher than last year.
Organic revenue growth was 4.3%. Revenue increases were achieved by all
divisions except the textiles and washroom services division where revenue was
flat year-on-year due to the impact of the closure of the UK linen and workwear
activities. The portfolio increased by £55.5 million or 3.5%, largely
reflecting the acquisition of Ehrlich in the pest control division.
In line with expectations, operating profit fell by £11.0 million or 15.3% in
the quarter. City Link was the only division to record a rise in operating
profit. Adjusting for the impact of one-off items of £3.5 million (2005: £1.0
million), adjusted operating profit was 11.7% lower than the same quarter last
year. The main contributors to this decline were:
• Increased operating losses in UK linen and workwear in the run up to
closure
• Planned revenue investment made during the quarter, particularly in
continental European textiles and washroom services, pest control,
electronic security and UK cleaning
• Adverse impact of 'Agenda for Change' on hospital services profitability
• Higher fuel and energy costs, up some 20% year-on-year
In addition to these trading items, the first quarter of 2005 included a £2.3
million credit against net interest payable relating to the Ashtead loan note
which was repaid in the middle of last year.
Group profit before tax, amortisation of customer lists and exceptional items
fell by £11.7 million (18.8%) in the first quarter compared to last year.
Adjusted profit before tax - which also excludes one-off items - fell by 14.6%.
DIVISIONAL PERFORMANCE
Textiles and Washroom Services
£m Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement (1.8) 15.5
Revenue 158.4 158.5 (0.1%)
Operating profit (before amortisation of customer lists & exceptional items) 25.8 30.3 (14.9%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 26.1 30.5 (14.4%)
The performance of the division was impacted significantly by the proposed
closure of the linen and workwear activities in the UK which was announced on 25
January. These activities will not be treated as discontinued until after
closure on 30 April. Revenue was flat for the division as a whole, whilst
adjusted operating profit fell by £4.4 million. Divisional operating profit did
improve month-by-month as the quarter progressed. The division's portfolio
declined by £1.8 million during the quarter with a net gain in continental
Europe offset by a net reduction in the UK.
Revenue in the UK fell by £3.9 million as linen and workwear customers started
to move their business to alternative suppliers. As a result, operating losses
increased to £3 million in that part of the business (2005: £0.8 million loss).
Exit costs remain within the guidance given in January of £13-18 million in the
first half of 2006.
The UK washroom business, which is being retained, is trading well and we are
encouraged by the progress being made as we continue to integrate and develop
it.
In continental Europe, market conditions remained tough in the first quarter
with the dual pressures of competition and weak economic performance
constraining demand for our services, particularly in France, the Netherlands,
Belgium and Germany. Against this background, revenue in continental Europe
grew by 3.1% year-on-year, of which 1.2% was organic. The majority of
businesses achieved revenue growth with the strongest increases in the hospital
activities of the French textiles business, the Spanish textiles business and
the Danish and Portuguese washroom businesses. Dutch textiles, however,
reported lower revenue than last year due to competitor pressure. The portfolio
in continental Europe increased by 3.5% in the first quarter. March saw the
best portfolio performance - net of price increases - for a number of months.
Planned investment in sales and service heads, increases in the price of fuel
and gas and the difficult trading environment combined to impact the operating
profit of the continental European businesses in the first quarter, which fell
9.1% year-on-year. The two largest businesses - French and Dutch textiles -
both saw profitability fall but some of the smaller countries did achieve
operating profit growth.
Pest Control
£m
Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 47.7 0.6
Revenue 57.2 50.1 14.2%
Operating profit (before amortisation of customer lists & exceptional items) 13.7 15.1 (9.3%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 14.3 15.1 (5.3%)
The pest control division enjoyed strong revenue growth of 14.2% compared to the
first quarter of last year. This was largely a result of the acquisition of
Ehrlich in the USA which contributed revenue of £4.7 million in the first
quarter following acquisition on 1 March 2006. Organic growth for the quarter
was 3.8%. Ehrlich and two small US bolt-on acquisitions also added £46.9
million to the portfolio. The UK pest control business is the subject of one of
the group's major performance improvement programmes and further changes were
made to this business's management team in the first quarter. First quarter
revenue in the UK was broadly unchanged on the prior year. Revenue increased in
the large continental European markets of France, Germany, the Netherlands,
Belgium, Portugal and Spain as well as most of the smaller countries of
operation. Revenue decreased in Ireland due in part to the loss of a
significant customer.
The strong positive net movement in the portfolio is due to Ehrlich. Excluding
acquisitions, the total portfolio increased by £0.8 million in the first
quarter. Terminations improved in almost all countries - evidence of the
benefit of improved service levels. However, new business wins in the UK and
France were somewhat disappointing and remain the subject of management focus.
Operating profit fell for the division as a whole by £1.4 million. Excluding
the impact of one-off items operating profit fell by £0.8 million. These
results are in line with management expectations for the quarter, reflecting
specific planned actions in the UK. The one-off items were largely
reorganisation costs in the UK which contributed to declining profits in that
business during the quarter. There was a mixed picture for operating profit in
continental Europe. Improvements were recorded in France, Belgium, the
Netherlands, Spain and Portugal in line with higher revenue and some margin
improvement due to lower costs. In other countries, particularly those in
northern Europe, operating profit was negatively impacted by adverse weather
conditions.
Tropical Plants
£m Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 0.4 3.7
Revenue 24.6 22.9 7.4%
Operating profit (before amortisation of customer lists & exceptional items) 0.8 1.1 (27.3%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 0.8 1.1 (27.3%)
Revenue for the tropical plants division was 7.4% higher year-on-year in the
first quarter, of which 3.1% was organic growth. Double digit growth was
recorded by the USA, the largest tropical plants operation, due mostly to strong
jobs revenue. In the UK - which recruited a new managing director during the
quarter - non-contract work also resulted in higher revenue. Most of the
continental European businesses also saw revenue increases due variously to
higher contract and jobs sales.
Overall, operating profit fell by £0.3 million due in the main to the increased
cost of the division's management infrastructure which has been significantly
upgraded since the first quarter of last year. This investment has been made to
enable us to address the performance of some of the division's underperforming
businesses. On the positive side, higher revenue from jobs in the USA resulted
in an increase in operating profit during the quarter. Elsewhere, however,
operating profit was impacted by margin pressure in some businesses -
particularly in France where a number of contracts were retendered during the
quarter - and higher plant and service costs.
Electronic Security
£m Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 0.7 1.7
Revenue 68.8 61.2 12.4%
perating profit (before amortisation of customer lists & exceptional items) 7.0 8.0 (12.5%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 7.6 8.0 (5.0%)
Organic revenue growth accounted for 3.3% of the 12.4% increase achieved in the
first quarter for the division as a whole. The £0.4 million decline in adjusted
operating profit represents increased sales and marketing spend added this year
in the UK, France and the Netherlands. The portfolio increased during the
quarter by £0.7 million.
In the UK, the top line benefited from sales and marketing investment put into
the business last year. In the UK fire and security sector, good revenue growth
was achieved on the back of 4% average portfolio growth and strong non-contract
revenue. The mix favoured lower margin activities compared with the same
quarter last year and higher sales and admin costs resulted in a small decline
in operating profit, although adjusting for specific one-off reorganisation and
acquisition integration costs operating profit improved. The UK systems sector
also produced a strong revenue performance, boosted by portfolio growth from the
acquisition of Attendo at the end of 2005. Operating profit was flat
year-on-year with the contribution from increased activity levels offset by
integration costs.
In France, revenue increased modestly due to growth in the portfolio, although
there was a slow start to the year in terms of non-contract revenue. Planned
investment in sales and infrastructure - a key driver of future growth in this
business - pushed operating profit below the first quarter of 2005.
The Netherlands reported increased revenue from both portfolio growth and strong
non-contract revenue. The costs of the quality and performance improvement
programme which is being undertaken as a key driver of profitable growth in the
second half of 2006 offset higher revenue and resulted in lower operating
profit.
Revenue and operating income were both up significantly in the small US
electronic security business due to the impact of the 2005 Videomaster
acquisition which doubled the portfolio compared with the first quarter of 2005.
City Link
£m4 Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Revenue 34.1 25.4 34.3%
Operating profit (before amortisation of customer lists & exceptional items) 5.7 5.2 9.6%
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 5.7 5.2 9.6%
Revenue for City Link increased by 34.3% in the first quarter. Revenue from
acquired franchises accounted for 21.1%, putting organic revenue growth at 13.2%
over the first quarter of 2005. Network volumes overall increased by 10.3% in
the quarter, with some important new accounts coming on stream for the first
time.
Operating profit increased by 9.6%, reflecting the benefit of higher volumes,
although average prices were lower than last year due to highly competitive
market conditions. Operating profit increased as a result of franchise
acquisitions but profit margins fell because franchise businesses typically run
at lower margins than our own company.
The franchise buy back programme announced in October 2005 is ongoing, with 35
of the 70 territories now in-house. Acquisition spend in the first quarter was
£10.5 million.
Facilities Services
£m Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 6.2 2.7
Revenue 160.9 141.0 14.1%
Operating profit (before amortisation of customer lists & exceptional items) 8.7 10.3 (15.5%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 8.7 10.3 (15.5%)
Following good portfolio growth in 2005, revenue in the first quarter rose by
14.1% year-on-year to £160.9 million. Operating profit fell by £1.6 million as
a result of planned revenue investments of some £1 million during the quarter -
particularly in UK cleaning - and lower margins and losses in hospital services.
The UK, Canadian and Belgian manned guarding activities have been sold and are
therefore treated as discontinued operations.
US manned guarding reported good revenue growth due to the benefit of the
acquisitions made in 2005. Operating profit increased due to infrastructure
synergies and reductions in state unemployment insurance (SUI) rates.
Revenue for UK cleaning moved ahead positively during the first quarter in line
with good portfolio growth in the second half of last year and strong job work
during March. Operating profit fell due to margin pressure and planned revenue
investment. Cleaning in Spain and the Netherlands also reported portfolio and
revenue growth and operating profit rose in both these operations.
The catering business reported revenue growth over the previous year due to new
contract gains in 2005 and an increase in trading days compared with the first
quarter of last year. Operating profit also improved due to higher revenue and
margin improvement in the business and industry segment.
Operating profit for hospital services fell as a result of the known impact of '
Agenda for Change', which reduced profits by £0.6 million year-on-year.
Asia Pacific
£m
Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 2.6 1.4
Revenue 23.1 21.7 6.5%
Operating profit (before amortisation of customer lists & exceptional items) 4.9 5.5 (10.9%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 5.0 5.5 (9.1%)
Revenue for the Asia Pacific division was 6.5% higher than the same quarter last
year with all countries ahead with the exception of one small business. Of this
improvement, 6.1% was due to organic growth. The portfolio showed a net gain of
£2.6 million during the first quarter, with gains virtually across the board.
Excluding acquisitions, the net portfolio gain was £1.6 million.
In terms of operating profit, the picture is more mixed. Profits in South East
Asia were broadly flat overall. However margin pressure in the Australian
washroom business and the increase in divisional costs (where we have invested
in infrastructure to support planned growth in the region) resulted in
divisional operating profit £0.6 million behind last year.
Other
£m Q1 06 Q1 05 % change
At 2005 constant exchange rates:
Portfolio - net movement 0.8 0.9
Revenue 8.0 7.7 3.9%
Operating profit (before amortisation of customer lists & exceptional items) 2.9 3.1 (6.5%)
Adjusted operating profit (before one-off items, amortisation of
customer lists & exceptional items) 2.9 3.1 (6.5%)
'Other' businesses comprise our South African operations.
Discontinued Operations
The UK, Canadian and Belgian manned guarding businesses have been treated as
discontinued in this quarter.
Central Costs
Central costs of £8.7 million for the quarter increased by £1.9 million over
2005, primarily as a result of costs associated with the business review which
commenced in the second half of 2005 together with reorganisation costs.
Excluding the effect of one-off items, central costs were 13.3% higher than the
same quarter in 2005 as a result of higher investment in IT, the cost of
incentive schemes and the head office relocations.
Exceptional Items
The exceptional costs incurred in the first quarter of £1.3 million relate to
the closure of the UK linen and workwear operations. The bulk of the costs will
be recognised (as exceptionals) in the second quarter.
One-off Items
Details of the one-off items incurred in the first quarter are set out in
appendix 4. They relate to consultancy, reorganisation and redundancy costs.
Interest
Net interest payable of £11.0 million was £0.6 million higher than 2005 with
lower net borrowings being partly offset by higher interest rates, although a
change in the currency mix of debt in 2006 mitigated some of the rate increase.
In addition, the 2005 interest line included a £2.3 million credit in respect of
the amortisation of the discount on the Ashtead loan note which was redeemed in
the second half of 2005.
Pensions
The trustees of the UK defined benefit pension scheme changed the asset mix of
the fund's investments from 80% equities/20% fixed income to approximately 20%
equities/80% fixed income in early April.
Appendix 1
ANNUAL CONTRACT PORTFOLIO - CONTINUING BUSINESSES
3 Months to 31 March 2006
Net
£m at constant 2005 New Additions/
exchange rates 1.1.06 Business Terminations Reductions Acquisitions 31.3.06
Textiles & Washroom Services 604.0 14.6 (16.6) 0.2 - 602.2
Pest Control 161.7 6.3 (7.2) 1.7 46.9 209.4
Tropical Plants 85.0 2.3 (2.8) 0.9 - 85.4
Electronic Security 99.2 2.4 (2.9) 1.2 - 99.9
Manned Guarding 125.2 5.7 (4.7) (1.2) - 125.0
Other* 351.8 9.4 (8.1) 5.1 - 358.2
Facilities Services* 477.0 15.1 (12.8) 3.9 - 483.2
Asia Pacific 115.1 3.8 (3.3) 1.2 0.9 117.7
Other 27.8 0.9 (0.9) 0.8 - 28.6
TOTAL 1,569.8 45.4 (46.5) 9.9 47.8 1,626.4
* Includes net adjustment of £92.8 million for the removal of catering and
property which are no longer considered to be portfolio businesses.
Notes
Contract Portfolio Definition: Customer contracts are usually either 'fixed
price', 'as-used' (based on volume) or mixed contracts. Contract portfolio is
the measure of the annualised value of these customer contracts.
Contract Portfolio Valuation: The contract portfolio value is typically recorded
as the annual value from the customer contract. However, in some cases -
especially 'as-used' (based on volume) and mixed contracts - estimates are
required in order to derive the contract portfolio value. The key points in
respect of valuation are:
'As-used' contracts: These are more typical in textiles and washroom services,
where elements of the contract are often variable and based on usage. Valuation
is based on historic data (where available) or forecast values.
Income annualisation: In some instances, where for example the underlying
contract systems cannot value portfolio, or there is a significant 'as-used'
element, the portfolio valuation is calculated using an invoice annualisation
method.
Inter-company: The contract portfolio figures include an element of
inter-company revenue.
Job Work and Extras: Many of the contracts within the contract portfolio
include ad hoc and/or repeat job work and extras. These values are excluded
from the contract portfolio.
Rebates: The contract portfolio value is gross of customer rebates. These are
considered as a normal part of trading and are therefore not removed from the
portfolio valuation.
New Business: Represents new contractual arrangements in the period, which can
either be new contracts with an existing customer, or with a new customer.
Terminations: Represent the cessation of either a specific existing customer
contract or the complete cessation of business with a customer, in the period.
Net Additions / Reductions: Represents net change to the value of existing
customer contracts in the period as a result of changes (either up or down) in
volume and/or pricing.
Acquisitions: Represents the valuation of customer contracts obtained from
acquisitions made in the period.
Appendix 2
Divisional Analysis (at constant exchange rates)
(based upon the way businesses are managed)
3 months to 3 months to
31 March 31 March
2006 2005
(at 2005 constant exchange rates) £m £m
(unaudited & (unaudited &
unreviewed) unreviewed)
Business Analysis
Revenue
Textiles & Washroom Services 158.4 158.5
Pest Control 57.2 50.1
Tropical Plants 24.6 22.9
Electronic Security 68.8 61.2
City Link 34.1 25.4
Manned Guarding 32.6 28.3
Other 128.3 112.7
Facilities Services 160.9 141.0
Asia Pacific 23.1 21.7
Other 8.0 7.7
Continuing operations at 2005 constant exchange rates 535.1 488.5
Exchange 4.4 0.1
Continuing operations at actual exchange rates 539.5 488.6
Operating Profit*
Textiles & Washroom Services 25.8 30.3
Pest Control 13.7 15.1
Tropical Plants 0.8 1.1
Electronic Security 7.0 8.0
City Link 5.7 5.2
Manned Guarding 1.2 0.9
Other 7.5 9.4
Facilities Services 8.7 10.3
Asia Pacific 4.9 5.5
Other 2.9 3.1
Central Items (8.7) (6.8)
Continuing operations at 2005 constant exchange rates 60.8 71.8
Exchange 0.3 0.3
Continuing operations at actual exchange rates 61.1 72.1
* Before amortisation of customer lists and items identified as exceptional.
Appendix 3
Divisional Analysis (at actual exchange rates)
(based upon the way businesses are managed)
3 months to 3 months to
31 March 31 March
2006 2005
(at actual exchange rates) £m £m
(unaudited & (unaudited &
unreviewed) unreviewed)
Business Analysis
Revenue
Textiles & Washroom Services 158.9 160.1
Pest Control 57.7 50.2
Tropical Plants 25.3 22.4
Electronic Security 69.1 61.4
City Link 34.1 25.4
Manned Guarding 34.0 27.1
Other 128.4 112.9
Facilities Services 162.4 140.0
Asia Pacific 23.6 21.2
Other 8.4 7.9
Continuing operations at actual exchange rates 539.5 488.6
Operating Profit*
Textiles & Washroom Services 25.7 30.6
Pest Control 13.8 15.2
Tropical Plants 0.7 1.1
Electronic Security 7.0 8.0
City Link 5.7 5.2
Manned Guarding 1.3 0.9
Other 7.5 9.4
Facilities Services 8.8 10.3
Asia Pacific 5.0 5.3
Other 3.1 3.2
Central Items (8.7) (6.8)
Continuing operations at actual exchange rates 61.1 72.1
* Before amortisation of customer lists and items identified as exceptional.
Appendix 4
One-off Items
3 months to 3 months to 3 months to
31 March 31 March 31 March
2006* 2006** 2005**
£m £m £m
(unaudited & (unaudited & (unaudited &
unreviewed) unreviewed) unreviewed)
Textiles & Washroom Services (0.3) (0.3) (0.2)
Pest Control (0.6) (0.6) -
Tropical Plants - - -
Electronic Security (0.6) (0.6) -
City Link - - -
Facilities Services - - -
Asia Pacific (0.1) (0.1) -
Other - - -
Central Items (1.9) (1.9) (0.8)
(3.5) (3.5) (1.0)
* At actual exchange rates.
** At 2005 constant exchange rates.
This information is provided by RNS
The company news service from the London Stock Exchange
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