Business
Closure of Activity
Closure of Activity.
About this update from Rentokil Initial Plc
[{"type":"text","content":"\n Rentokil Initial PLC\n25 January 2006\n\n25 January 2006\n\n\n\n Closure of Loss-Making Linen and Workwear Services\n\n\nRentokil Initial plc (the 'Company') today announced the closure of the\nloss-making UK Linen and Workwear operations of Initial Hygiene UK, in order to\nfocus on its market-leading UK Washroom and Dustmat business. Having explored\nthoroughly all options for exiting the loss-making operations, the Company has\nregretfully concluded that these operations will be closed on 30 April 2006.\n\n\nA full consultative process with customers and affected employees will begin\nimmediately, in an effort to ensure continuity of service with alternative\nsuppliers and to minimise the potential redundancies resulting from the closure.\nThe Linen and Workwear operations currently employ some 2,000 people across\nthe UK and up to 1,700 positions could be made redundant. An employee\nconsultation process will be undertaken and the Company will make all efforts to\nminimise redundancies including considering alternative employment within the\nRentokil Initial Group. No final decisions as to numbers of redundancies will be\nmade until the conclusion of the collective and individual consultation\nprocesses.\n\n\nRentokil Initial plc announced in November 2004 that it had taken the decision\nto exit the loss-making Linen and Workwear elements of Initial Hygiene UK. The\nUK Linen and Workwear business has been significantly underinvested, is based on\nan inefficient distribution structure and historically has pursued a flawed\ncommercial strategy. The Company will continue to develop its UK Washroom and\nDustmat business, Washroom Solutions UK, which has a strong and profitable\nmarket position. To that end, management started the complex and lengthy process\nof separating the plant and delivery mechanisms relating to Linen and Workwear\nfrom the activities being retained. This separation was finally completed in\nDecember 2005.\n\n\nIn parallel with the operational separation, the Company explored in detail how\nbest to structure an exit and so stem increasing losses, while protecting the\nvalue of the on-going UK Washroom and Dustmat business. In particular, the\nCompany examined whether it was possible to sell the business to one or more\nthird parties while ensuring an orderly and controlled transfer of customer\ncontracts....