Rentokil Initial Regulatory News (RTO)

25 Oct 2005 07:00

Rentokil Initial PLC25 October 2005 25 October 2005 Rentokil Initial's parcels business plans to cease franchising Rentokil Initial has today announced that its parcels delivery business InitialCity Link will, over a period of time, cease to operate on a franchised basis. This is another important step forward in Rentokil Initial's development. Thechange will return full control of Initial City Link to the Company and shoulddeliver better returns for our shareholders while maintaining or improvingservice to Initial City Link's customers. Franchisees, who collectively have anestimated annual profit of £5 million, will be offered a fair price for theirbusinesses and will be given plenty of time to plan the transition. The franchise model used by Initial City Link has been in place since the early1990's largely unchanged and the franchisees have played an important part inits growth. However, thanks to recent investment in franchisor sales andmarketing and a renewed focus on personnel, better growth is being experiencedin Initial City Link's controlled and operated branches than in those of thefranchisees. When combined with the opportunity to develop the business andaddress the increasingly complex demands of customers, a decision to movetowards owning the network makes strong commercial sense. Following consultation with individual franchisees, Initial City Link plans tomake offers to purchase their businesses over a period of time. Franchisees'employees will be invited to join the Rentokil Initial group. Initial City Link has 70 franchise territories of which it already controls andoperates 25. Initial City Link will be working closely with its franchisees toensure a smooth transfer of service for customers. The changes planned shouldultimately result in Initial City Link customers experiencing an enhancedservice. Enquiries: John Sunnucks, Gill Ackers; Brunswick Group LLP 020 7404 5959Charles Grimaldi, Rentokil Initial plc 01342 833022 NOTES FOR EDITORS Initial City Link Initial City Link is one of the leading parcel delivery companies in the UK. Itspecialises in premium next day parcel delivery and has outgrown the marketevery year for the last ten years. In 2004, Initial City Link's turnover was£223 million and profit £31.3 million. Sales in the franchise network not ownedby Initial City Link amounted to £197 million last year. Initial City Linkalready employs 2,179 people across the country and on average delivers 854,000parcels a week to businesses and households across the country. Rentokil Initial Rentokil Initial is one of the largest business services companies in the world,operating in all the major economies of Europe, North America, Asia Pacific andAfrica. The company has some 90,000 employees providing a range of supportservices in over 40 countries where the 'Rentokil' and 'Initial' brands havecome to represent innovation, deep expertise and consistent quality of service.Services include pest control, tropical plants, hygiene services, facilitiesservices, electronic security and parcels delivery. This information is provided by RNS The company news service from the London Stock Exchange