Pest control firm Rentokil expanded into washroom hygiene and office plants
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Business services firm Rentokil Initial has seen its shares plunge 13.7% after issuing a profit warning.
This year business had been "extremely disappointing, with increasingly difficult market conditions," it said.
Chairman Sir Clive Thompson - once dubbed Mr 20% for his profits growth record - will step down to be replaced by deputy chairman Brian McGowan.
Rentokil said it is still waiting for investment in its sales force and new technology to bring returns.
It predicted pre-tax profits of about �350m for 2004, against previous forecasts of �410m and compared with profits of �400m last year.
The company said operating profits has fallen across most of its businesses, with hygiene services, tropical plants (for offices) and pest control particularly hard hit.
Rentokil's chief executive, James Wilde, said: "We have had a poor start to the year, but I am confident in our plan to continue to develop our four markets, hygiene, security, facilities management and parcels delivery."
Rentokil would try to focus on its business in continental Europe, hoping to repeat the "density and coverage of our UK operations".
The company's situation is in sharp contrast with Rentokil's past performance, when Sir Clive promised investors annual earnings growth of 20% and more.
Conglomerate
The origins of Rentokil Initial are complex: the company is a conglomerate formed out of the merger of often unconnected businesses.
The first of these was started in 1902, when a Danish pharmacist, Georg Neumann, discovered a strain of bacteria that was lethal to rats and mice.
He named it Ratin bacterium and set up a company around his discovery. The British Ratin Company was formed in 1927.
Meanwhile, in 1925, a professor at Imperial College London called Harold Leroy, discovered a fluid that killed deathwatch beetles, which he registered as Rentokil.
Rentokil was bought by the British Ratin Company in 1957. The combined company, which kept the Rentokil name, was floated on the Stock Exchange in 1969.
Meanwhile in 1903 a towel renting service for London businesses was launched under the name Initial, so called because each towel was personalised with the customer's initials.
In 1985, Rentokil acquired the company, merging its own laundry services with those of Initial. The company changed its name to Rentokil Initial in October 1996.
Today, the company is into two major areas: Focus and Bundling.
The Focus group has six sections: Hygiene (basically cleaning operations), Security, Pest Control, Tropical Plants (which looks after office plants), Conferencing and Parcels Delivery.
The Bundling Group consists of just one section called facilities management. It offers multi service contracts covering everything from cleaning, catering and management services.
The company employs about 93,000 people in more than 40 countries.
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We have had a poor start to the year
