Rentokil ahead of schedule with integration project

Rentokil Initial said today that it is making "good progress" with integrating its parcel delivery businesses and is beginning to develop shared services across its businesses.

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Rentokil Initial said today that it is making "good progress" with integrating its parcel delivery businesses and is beginning to develop shared services across its businesses.

Rentokil, which is best known for its washroom services, pest control and cleaning businesses, bought parcel delivery business Target Express late last year for £210m.

Integrating the systems of Target Express and its City Link parcel-delivery business was a key driver for the deal, and Rentokil said today that the programme was proceeding more quickly than expected.

The customer service structure of the two business was fully integrated by May, and in July the two businesses moved to a common IT platform, Rentokil said.

But the faster-than-expected progress meant that integration costs have also been higher than expected, said Rentokil, though this was offset by savings being registered more quickly.

The group is now expecting to spend £9m on integration this year, up from an original estimate of £6m, but is also expecting to make savings arising from the programme of up to £3m this year which had not originally been budgeted.

When the deal was signed last year, City Link management said that annual savings arising from synergies should reach £10m annually by the end of 2008. "These synergies will be realised through operational integration and investment in IT, resulting in improved network efficiencies and back office support functions," it said.

Elsewhere in the group, Rentokil said today that savings from shared services were also in the pipeline, with the recent establishment of a 400-seat shared service centre in the Midlands. The new centre will meet many of the front- and back-office needs of the group's UK Washroom, Pest Control, Ambius and Facilities Services businesses.

Rentokil also said its redesigned website, Rentokil Online, was now live in 40 countries, with 15 Asia-Pacific countries having gone live with the site this month.

It said the site could now differentiate between residential and commercial visitors, and visitor traffic was encouraging, with 98,000 visitors to rentokil.com since July and 550,000 visitors to all the country sites since going live.

It said the site was also better integrated with its Dudley call centre, with staff at the call centre dealing with more and more enquiries submitted via the web.

Rentokil last year embarked on a £35m, five-year overhaul of the group's IT systems, replacing paper-based systems in many of its businesses for the first time.

But in the UK many changes will be in place by the end of this year, by which time the business has promised centralised back office facilities running at full strength and the widespread use of a range of new Oracle systems.

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