Rentokil Initial Regulatory News (RTO)

4 May 2006 07:01

Rentokil Initial PLC04 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 performanceimprovement initiatives which are underway across the group. There was evidencein the quarter that these initiatives are working, with revenues increasing bothorganically and through acquisitions. Nevertheless there remains much more todo. The profit performance of the group, although down on last year, was inline with our own expectations for the quarter and statements made at the timeof the preliminary results in February. "The economic environment in some of our major markets remains unhelpful but wemust deal with the markets as they are, not as we would wish them to be. Wecontinue to expect that we will not achieve growth in full year adjusted profitbefore tax before 2007 but that we will exit 2006 with a rising second halftrend." FIRST QUARTER OVERVIEW Since the interim results in August 2005, we have reported on developments inthree areas of attention: strategy; people and structure; and operations.Progress made in each of these areas during the first quarter of 2006 isdetailed below. Strategy Work continued in the first quarter towards our goals to achieve clearerstrategic focus and to build stronger strategic positions in our businesses. The acquisition of J.C. Ehrlich Co. Inc. ("Ehrlich") was completed on 1 Marchfor a gross consideration of $141.8 million (£80.1 million). Ehrlich was thelargest independently-owned pest control company in the USA and the fourthlargest overall. Its operations are focused on the eastern seaboard and arecomplementary to our existing US pest control operations. This key acquisitiongives us a solid platform for growth in the USA, which is considered to be oneof the fastest growing of the western pest control markets. Following theacquisition, 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 andthe Belgian activities on 21 April. The group continues to explore the possibledisposal of the remaining manned guarding business in the USA. The buy-in of City Link franchises continued in the first quarter. Twobusinesses 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 considerationof £2.2 million. These were predominantly in the pest control and tropicalplants divisions. The group launched a £300 million issue of notes under its EMTN programme on 21March 2006. The notes carry a coupon of 5.75% per annum and will mature on 31March 2016. The issue was aimed at progressively lengthening the group's debtmaturity 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 inthe pest control, tropical plants and Asia Pacific businesses. A new long-term incentive programme for the group's most senior managers will beput to shareholders at the annual general meeting on 18 May. The corporate head offices at Felcourt and East Grinstead have relocated to newoffices in London and Gatwick. Operations Our priorities in the first quarter were to continue the implementation of thedetailed turnaround and performance improvement programmes. Progress is beingmade in the projects across a broad front. In January, the group announced that it would close the loss-making UK linen andworkwear operations on 30 April 2006. Detailed arrangements to assist customersin finding alternative suppliers were mobilised and a consultation and supportprogramme was put in place for the 1,800 affected employees. The UK washroom business was finally separated from linen and workwear duringDecember and this quarter was its first as a standalone business.Implementation of the new Oracle ERP and CRM system - which will ultimately runacross the group - commenced during the quarter and is scheduled to be completedin this business during the third quarter of 2006. Sales and marketing efforts have been boosted in the pest control division withthe launch of www.rentokil.com on 1 March. This global landing page enhancesthe online content of some of our major pest control businesses and provides ane-presence for the first time for others. Early indications are that asignificant number of new business leads are being generated through thismedium. We have recently acquired www.initial.com which will be used to developthe online presence of our Initial branded businesses in a similar fashion. 2006 OUTLOOK Market conditions in our textiles and washroom businesses remain difficult insome of the main European markets, particularly France, the Netherlands, Belgiumand Germany. Across the group as a whole, revenue growth and contract retentionare both expected to improve in 2006 and there was some evidence of this in thefirst quarter. We continue to expect that we will not achieve growth in fullyear adjusted profit before tax before 2007 but that we will exit 2006 with arising second half trend. For further information: Shareholder/analyst enquiries: Andrew Macfarlane, Chief Financial Officer Rentokil Initial plcLisa Williams, IR Manager Tel: 020 7866 3000 Media enquiries: John Sunnucks Brunswick GroupJon Rhodes Tel: 020 7404 5959 A conference call for analysts and shareholders will be held on Thursday 4 Mayat 9:00am. To join this call, please dial +44 (0) 20 7138 0818. A recording ofthe call will be available for 14 days on the following numbers: UK - +44 (0) 207806 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, plansand objectives. Such statements involve risk and uncertainty because theyrelate to future events and circumstances, and there are accordingly a number offactors which might cause actual results and performance to differ materiallyfrom those expressed or implied by such statements.GROUP PERFORMANCE Basis of Preparation In all cases, references to operating profit are for continuing businessesbefore amortisation of customer lists and exceptional items. References toadjusted 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 ofcustomer lists, have impacted the results for the period. These principallyrelate to reorganisation and redundancy costs, associated asset impairments,profit on the sale of land and buildings and professional and other costs in thegroup 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 alldivisions except the textiles and washroom services division where revenue wasflat year-on-year due to the impact of the closure of the UK linen and workwearactivities. The portfolio increased by £55.5 million or 3.5%, largelyreflecting the acquisition of Ehrlich in the pest control division. In line with expectations, operating profit fell by £11.0 million or 15.3% inthe quarter. City Link was the only division to record a rise in operatingprofit. Adjusting for the impact of one-off items of £3.5 million (2005: £1.0million), adjusted operating profit was 11.7% lower than the same quarter lastyear. 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 £2.3million credit against net interest payable relating to the Ashtead loan notewhich was repaid in the middle of last year. Group profit before tax, amortisation of customer lists and exceptional itemsfell 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 ofcustomer lists & exceptional items) 26.1 30.5 (14.4%) The performance of the division was impacted significantly by the proposedclosure of the linen and workwear activities in the UK which was announced on 25January. These activities will not be treated as discontinued until afterclosure on 30 April. Revenue was flat for the division as a whole, whilstadjusted operating profit fell by £4.4 million. Divisional operating profit didimprove month-by-month as the quarter progressed. The division's portfoliodeclined by £1.8 million during the quarter with a net gain in continentalEurope offset by a net reduction in the UK. Revenue in the UK fell by £3.9 million as linen and workwear customers startedto move their business to alternative suppliers. As a result, operating lossesincreased 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 thefirst half of 2006. The UK washroom business, which is being retained, is trading well and we areencouraged by the progress being made as we continue to integrate and developit. In continental Europe, market conditions remained tough in the first quarterwith the dual pressures of competition and weak economic performanceconstraining demand for our services, particularly in France, the Netherlands,Belgium and Germany. Against this background, revenue in continental Europegrew by 3.1% year-on-year, of which 1.2% was organic. The majority ofbusinesses achieved revenue growth with the strongest increases in the hospitalactivities of the French textiles business, the Spanish textiles business andthe Danish and Portuguese washroom businesses. Dutch textiles, however,reported lower revenue than last year due to competitor pressure. The portfolioin continental Europe increased by 3.5% in the first quarter. March saw thebest portfolio performance - net of price increases - for a number of months. Planned investment in sales and service heads, increases in the price of fueland gas and the difficult trading environment combined to impact the operatingprofit of the continental European businesses in the first quarter, which fell9.1% year-on-year. The two largest businesses - French and Dutch textiles -both saw profitability fall but some of the smaller countries did achieveoperating 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 ofcustomer lists & exceptional items) 14.3 15.1 (5.3%) The pest control division enjoyed strong revenue growth of 14.2% compared to thefirst quarter of last year. This was largely a result of the acquisition ofEhrlich in the USA which contributed revenue of £4.7 million in the firstquarter following acquisition on 1 March 2006. Organic growth for the quarterwas 3.8%. Ehrlich and two small US bolt-on acquisitions also added £46.9million to the portfolio. The UK pest control business is the subject of one ofthe group's major performance improvement programmes and further changes weremade to this business's management team in the first quarter. First quarterrevenue in the UK was broadly unchanged on the prior year. Revenue increased inthe large continental European markets of France, Germany, the Netherlands,Belgium, Portugal and Spain as well as most of the smaller countries ofoperation. Revenue decreased in Ireland due in part to the loss of asignificant customer. The strong positive net movement in the portfolio is due to Ehrlich. Excludingacquisitions, the total portfolio increased by £0.8 million in the firstquarter. Terminations improved in almost all countries - evidence of thebenefit of improved service levels. However, new business wins in the UK andFrance were somewhat disappointing and remain the subject of management focus. Operating profit fell for the division as a whole by £1.4 million. Excludingthe impact of one-off items operating profit fell by £0.8 million. Theseresults are in line with management expectations for the quarter, reflectingspecific planned actions in the UK. The one-off items were largelyreorganisation costs in the UK which contributed to declining profits in thatbusiness during the quarter. There was a mixed picture for operating profit incontinental Europe. Improvements were recorded in France, Belgium, theNetherlands, Spain and Portugal in line with higher revenue and some marginimprovement due to lower costs. In other countries, particularly those innorthern Europe, operating profit was negatively impacted by adverse weatherconditions. 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 ofcustomer lists & exceptional items) 0.8 1.1 (27.3%) Revenue for the tropical plants division was 7.4% higher year-on-year in thefirst quarter, of which 3.1% was organic growth. Double digit growth wasrecorded by the USA, the largest tropical plants operation, due mostly to strongjobs revenue. In the UK - which recruited a new managing director during thequarter - non-contract work also resulted in higher revenue. Most of thecontinental European businesses also saw revenue increases due variously tohigher contract and jobs sales. Overall, operating profit fell by £0.3 million due in the main to the increasedcost of the division's management infrastructure which has been significantlyupgraded since the first quarter of last year. This investment has been made toenable us to address the performance of some of the division's underperformingbusinesses. On the positive side, higher revenue from jobs in the USA resultedin 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 thequarter - 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 ofcustomer lists & exceptional items) 7.6 8.0 (5.0%) Organic revenue growth accounted for 3.3% of the 12.4% increase achieved in thefirst quarter for the division as a whole. The £0.4 million decline in adjustedoperating profit represents increased sales and marketing spend added this yearin the UK, France and the Netherlands. The portfolio increased during thequarter by £0.7 million. In the UK, the top line benefited from sales and marketing investment put intothe business last year. In the UK fire and security sector, good revenue growthwas achieved on the back of 4% average portfolio growth and strong non-contractrevenue. The mix favoured lower margin activities compared with the samequarter last year and higher sales and admin costs resulted in a small declinein operating profit, although adjusting for specific one-off reorganisation andacquisition integration costs operating profit improved. The UK systems sectoralso produced a strong revenue performance, boosted by portfolio growth from theacquisition of Attendo at the end of 2005. Operating profit was flatyear-on-year with the contribution from increased activity levels offset byintegration costs. In France, revenue increased modestly due to growth in the portfolio, althoughthere was a slow start to the year in terms of non-contract revenue. Plannedinvestment in sales and infrastructure - a key driver of future growth in thisbusiness - pushed operating profit below the first quarter of 2005. The Netherlands reported increased revenue from both portfolio growth and strongnon-contract revenue. The costs of the quality and performance improvementprogramme which is being undertaken as a key driver of profitable growth in thesecond half of 2006 offset higher revenue and resulted in lower operatingprofit. Revenue and operating income were both up significantly in the small USelectronic security business due to the impact of the 2005 Videomasteracquisition 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 ofcustomer lists & exceptional items) 5.7 5.2 9.6% Revenue for City Link increased by 34.3% in the first quarter. Revenue fromacquired 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% inthe quarter, with some important new accounts coming on stream for the firsttime. Operating profit increased by 9.6%, reflecting the benefit of higher volumes,although average prices were lower than last year due to highly competitivemarket conditions. Operating profit increased as a result of franchiseacquisitions but profit margins fell because franchise businesses typically runat lower margins than our own company. The franchise buy back programme announced in October 2005 is ongoing, with 35of 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 ofcustomer lists & exceptional items) 8.7 10.3 (15.5%) Following good portfolio growth in 2005, revenue in the first quarter rose by14.1% year-on-year to £160.9 million. Operating profit fell by £1.6 million asa 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 aretherefore treated as discontinued operations. US manned guarding reported good revenue growth due to the benefit of theacquisitions made in 2005. Operating profit increased due to infrastructuresynergies and reductions in state unemployment insurance (SUI) rates. Revenue for UK cleaning moved ahead positively during the first quarter in linewith good portfolio growth in the second half of last year and strong job workduring March. Operating profit fell due to margin pressure and planned revenueinvestment. Cleaning in Spain and the Netherlands also reported portfolio andrevenue growth and operating profit rose in both these operations. The catering business reported revenue growth over the previous year due to newcontract gains in 2005 and an increase in trading days compared with the firstquarter of last year. Operating profit also improved due to higher revenue andmargin 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 ofcustomer lists & exceptional items) 5.0 5.5 (9.1%) Revenue for the Asia Pacific division was 6.5% higher than the same quarter lastyear with all countries ahead with the exception of one small business. Of thisimprovement, 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 EastAsia were broadly flat overall. However margin pressure in the Australianwashroom business and the increase in divisional costs (where we have investedin infrastructure to support planned growth in the region) resulted indivisional 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 ofcustomer 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 asdiscontinued in this quarter. Central Costs Central costs of £8.7 million for the quarter increased by £1.9 million over2005, primarily as a result of costs associated with the business review whichcommenced in the second half of 2005 together with reorganisation costs.Excluding the effect of one-off items, central costs were 13.3% higher than thesame quarter in 2005 as a result of higher investment in IT, the cost ofincentive schemes and the head office relocations. Exceptional Items The exceptional costs incurred in the first quarter of £1.3 million relate tothe closure of the UK linen and workwear operations. The bulk of the costs willbe recognised (as exceptionals) in the second quarter. One-off Items Details of the one-off items incurred in the first quarter are set out inappendix 4. They relate to consultancy, reorganisation and redundancy costs. Interest Net interest payable of £11.0 million was £0.6 million higher than 2005 withlower net borrowings being partly offset by higher interest rates, although achange 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 ofthe amortisation of the discount on the Ashtead loan note which was redeemed inthe second half of 2005. Pensions The trustees of the UK defined benefit pension scheme changed the asset mix ofthe 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 - 602.2Pest Control 161.7 6.3 (7.2) 1.7 46.9 209.4Tropical 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) - 125.0Other* 351.8 9.4 (8.1) 5.1 - 358.2Facilities 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 - 28.6TOTAL 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 andproperty which are no longer considered to be portfolio businesses. Notes Contract Portfolio Definition: Customer contracts are usually either "fixedprice", "as-used" (based on volume) or mixed contracts. Contract portfolio isthe measure of the annualised value of these customer contracts. Contract Portfolio Valuation: The contract portfolio value is typically recordedas the annual value from the customer contract. However, in some cases -especially "as-used" (based on volume) and mixed contracts - estimates arerequired in order to derive the contract portfolio value. The key points inrespect 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. Valuationis based on historic data (where available) or forecast values. Income annualisation: In some instances, where for example the underlyingcontract systems cannot value portfolio, or there is a significant "as-used"element, the portfolio valuation is calculated using an invoice annualisationmethod. Inter-company: The contract portfolio figures include an element ofinter-company revenue. Job Work and Extras: Many of the contracts within the contract portfolioinclude ad hoc and/or repeat job work and extras. These values are excludedfrom the contract portfolio. Rebates: The contract portfolio value is gross of customer rebates. These areconsidered as a normal part of trading and are therefore not removed from theportfolio valuation. New Business: Represents new contractual arrangements in the period, which caneither be new contracts with an existing customer, or with a new customer. Terminations: Represent the cessation of either a specific existing customercontract or the complete cessation of business with a customer, in the period. Net Additions / Reductions: Represents net change to the value of existingcustomer contracts in the period as a result of changes (either up or down) involume and/or pricing. Acquisitions: Represents the valuation of customer contracts obtained fromacquisitions made in the period. Appendix 2Divisional 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 158.4 158.5Pest Control 57.2 50.1Tropical Plants 24.6 22.9Electronic Security 68.8 61.2City Link 34.1 25.4 Manned Guarding 32.6 28.3Other 128.3 112.7Facilities Services 160.9 141.0 Asia Pacific 23.1 21.7Other 8.0 7.7Continuing operations at 2005 constant exchange rates 535.1 488.5Exchange 4.4 0.1Continuing operations at actual exchange rates 539.5 488.6 Operating Profit* Textiles & Washroom Services 25.8 30.3Pest Control 13.7 15.1Tropical Plants 0.8 1.1Electronic Security 7.0 8.0City Link 5.7 5.2 Manned Guarding 1.2 0.9Other 7.5 9.4Facilities Services 8.7 10.3 Asia Pacific 4.9 5.5Other 2.9 3.1Central Items (8.7) (6.8)Continuing operations at 2005 constant exchange rates 60.8 71.8Exchange 0.3 0.3Continuing 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 158.9 160.1Pest Control 57.7 50.2Tropical Plants 25.3 22.4Electronic Security 69.1 61.4City Link 34.1 25.4 Manned Guarding 34.0 27.1Other 128.4 112.9Facilities Services 162.4 140.0 Asia Pacific 23.6 21.2Other 8.4 7.9Continuing operations at actual exchange rates 539.5 488.6 Operating Profit* Textiles & Washroom Services 25.7 30.6Pest Control 13.8 15.2Tropical Plants 0.7 1.1Electronic Security 7.0 8.0City Link 5.7 5.2 Manned Guarding 1.3 0.9Other 7.5 9.4Facilities Services 8.8 10.3 Asia Pacific 5.0 5.3Other 3.1 3.2Central 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