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Shares in British pest control giant Rentokil Initial soared as investors welcomed progress in the turnaround of its troubled North American business.
As well as reporting a steady 3.6 per cent rise in revenue to £1.4billion in the third quarter, the royal ratcatcher announced a management overhaul at its operations on the other side of the Atlantic.
It also said it has axed around 250 staff in North America having overspent during the summer ahead of an expected surge in demand that did not materialise.
Job cuts: Rentokil said it has axed around 250 staff in North America having overspent during the summer ahead of an expected surge in demand that did not materialise
Shares in Rentokil – which won pest control contracts at Buckingham Palace in the 1960s – jumped 8.8 per cent, or 29.9p, to 371p.
But the stock remains down around 20 per cent since its troubles in North America triggered a brutal profit warning last month.
And chief executive Andy Ransom is under pressure from billionaire activist investor Nelson Peltz, who has built up his stake in the business through his firm Trian Partners and has a representative on the board.
‘While today’s material bounce in the share price for pest control firm Rentokil will be sweet relief for shareholders who have endured a tough period, the move is worth putting in context,’ said Russ Mould, investment director at broker AJ Bell.
‘With a representative from Nelson Peltz’s Trian vehicle on the board, pressure on its management is likely to remain acute. Chief executive Andy Ransom needs to deliver.’
Rentokil was the biggest riser in the FTSE 100 as the blue chip index gained 0.7 per cent, or 56.06 points, to 8385.13 and the FTSE 250 added 0.6 per cent, or 121.42 points, to 21,100.92.
Stock Watch – GB Group
Shares in identity verification firm GB Group soared as investors cheered an upbeat set of results.
The software company, which helps businesses tackle fraud, said revenues rose 4.5 per cent to £137million in the six months to the end of September.
First-half profits rose 21 per cent to £29million.
Chief executive Dev Dhiman said the ‘positive operating momentum we carry into the second half’ underpins its confidence for the future.
Shares surged 13.1 per cent, or 38p, to 327.2p.
The biggest faller in London’s top flight was paper and packaging group Mondi, which crashed 7.5 per cent, or 103.5p, to 1286.5p after it reported a disappointing third quarter.
The company, which has over 100 production sites in more than 30 countries, posted a 36 per cent fall in earnings to £186million for the period in part due to planned shutdowns for maintenance.
The group said it expected an improvement in the fourth quarter but it was not enough to stop the share price sell-off.
Shares in Tate & Lyle slipped 3.6 per cent, or 29p, to 778p as investors remained in the dark over a possible takeover swoop.
The ingredients maker, which traces its roots back to 1859, jumped nearly 8 per cent on Wednesday on reports that US private equity group Advent International was planning to swoop.
Those hoping for some concrete information, or some sort of update yesterday, were left disappointed, however, sending shares lower.
Food orders from takeaway specialist Deliveroo rose in the three months to the end of September amid ‘healthy’ demand in the UK and Ireland.
The company said earnings for the full year are now on track to be in the ‘upper half’ of its £110million to £130million range as a result. Shares added 0.4 per cent, or 0.6p, to 147.5p.
Defence group Chemring said it has ‘received a number of significant orders’ in recent months. Shares rose 4.6 per cent, or 17p, to 383p.
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