Heavily indebted Rentokil Initial is working to spin-off its loss-making City Link business by the end of the year, according to reports in The Telegraph.
City Link, its parcel delivery service has been a drain on the company for a number of years. However, this division turns over £88m a year and Rentokil is said to favour a management buyout. This would avoid the costs of closing it down.
In the company's most recent market update in August, Chief Executive Alan Brown said City Link should be profitable by the end of the year.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
"City Link's recovery plan is progressing in line with expectations, both in terms of financial performance and underlying action plan. We expect losses to reduce further in Q3 and for the business to be profitable in Q4."
As of June 30th 2012, the group had net debts of £960m (2011: £1024.6m) with operating cash flow of £20.8m (2011: £24.5m).
CM
-
8 of the best houses for sale with annexesThe best houses with annexes – from a period property in the Lake District to a 13th-century house with a two-bedroom annexe in Saltwood, Kent
-
Zelenskyy moves to appease Donald Trump – what happens now?Ukraine’s president Volodymyr Zelenskyy is conceding ground to secure the least-worst deal possible, says Emily Hohler
