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Last Updated: Wednesday, 25 January 2006, 20:56 GMT
Rentokil jobs risk as unit shuts
Rentokil pest control (Picture from Rentokil)
Rentokil is best known for its pest control business
Rentokil Initial is closing its loss-making workwear and linen operations at Initial Hygiene UK, leaving up to 1,700 jobs at risk.

The business services company said the division had suffered from a significant lack of investment and a "flawed commercial strategy".

The business employs about 2,000 staff across the country.

Operations will shut down on 30 April so Initial Hygiene can focus on its washroom and dust mat business.

These areas were profitable and had a strong market position, Rentokil said.

"Today's announcement does not impact our linen and workwear operations in continental Europe, where we have built up a number of profitable and growing businesses," said chief executive Doug Flynn.

Spiralling costs of running the workwear and linen operations business meant selling the unit was not an option, the firm added.

Shake-up

The biggest regional operation hit will be in Catford, south London, where Initial Hygiene employs 221 workers.

The company has regretfully concluded that these operations will be closed on 30 April
Rentokil Initial

Other sites facing the chop are in Lowestoft, Suffolk and Nottingham.

"Having explored thoroughly all options for exiting the loss-making operations, the company has regretfully concluded that these operations will be closed on 30 April," Rentokil Initial said in a statement.

"Up to 1,700 positions could be made redundant."

Rentokil is in the middle of a major restructuring that saw it sell off its conference venues business for 325m in November last year.

Following that, the company announced plans to freeze its final salary pension scheme and close it to its existing members, in a bid to rein in rising pension costs.

This was the first such move by a FTSE 100 company.

Shares in the company closed up 5.5 pence, or 3.54%, at 161p by the close of trade on the London Stock Exchange.



SEE ALSO:
Rentokil agrees to buy US company
24 Jan 06 |  Business
Rentokil mothballs pension scheme
20 Dec 05 |  Business
Rentokil warns of tough outlook
30 Nov 04 |  Business
Sir Gerry drops Rentokil takeover
17 Oct 05 |  Business
Rentokil hit by drop in profits
25 Aug 05 |  Business


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