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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 £1.4bn in the third quarter, the royal rat catcher announced a review of the management of its operations across the Atlantic.
It also said it had laid off about 250 employees in North America after spending too much over the summer ahead of an expected surge in demand that failed to materialize.
Job cuts: Rentokil said it has laid off about 250 employees in North America after spending too much over the summer ahead of an expected surge in demand that failed to materialize.
Shares in Rentokil – which won pest control contracts at Buckingham Palace in the 1960s – rose 8.8 per cent, or 29.9 pence, to 371 pence.
But the stock is still down about 20 percent since its troubles in North America prompted a brutal profit warning last month.
And CEO Andy Ransom is under pressure from billionaire activist investor Nelson Peltz, who has increased his stake in the business through his firm Trian Partners and has a representative on the board.
“While today’s significant rebound in the share price of pest control company Rentokil will be a sweet relief for shareholders who have endured a difficult period, it is worth putting the move in context,” said Russ Mould, investment director of the brokerage AJ Bell.
‘With a representative of Nelson Peltz’s Trian vehicle on the board, pressure on its management is likely to remain intense. CEO Andy Ransom has to deliver.”
Rentokil was the biggest riser on the FTSE 100, as the blue-chip index gained 0.7 per cent, or 56.06 points, to 8,385.13 and the FTSE 250 added 0.6 per cent, or 121 .42 points, up to 21,100.92.
Stock Watch – GB Group
Shares in identity verification company GB Group soared as investors celebrated a series of upbeat results.
The software company, which helps businesses combat fraud, said revenue rose 4.5 per cent to £137 million in the six months to the end of September.
First half profits rose 21 per cent to £29m.
CEO Dev Dhiman said “the positive operational momentum we carried in the second half” underpins his confidence for the future.
The shares rose 13.1 per cent, or 38 pence, to 327.2 pence.
The biggest faller in London’s top flight was paper and packaging group Mondi, which slumped 7.5 per cent, or 103.5 pence, to 1,286.5 pence after reporting a disappointing third quarter.
The company, which has more than 100 production sites in more than 30 countries, recorded a 36 per cent drop in profits to £186 million during the period, partly due to planned maintenance shutdowns.
The group said it expected an improvement in the fourth quarter, but that it was not enough to stop the share price sell-off.
Tate & Lyle shares fell 3.6 per cent, or 29 pence, to 778 pence, as investors were left in the dark about a possible takeover.
The ingredients maker, whose roots date back to 1859, rose almost 8 percent on Wednesday following reports that US private equity group Advent International was planning a decline.
However, those who were hoping for some concrete information, or some kind of update yesterday, were disappointed, causing the stock to fall.
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 that, as a result, full-year profits are now on track to be in the “upper half” of its range of £110m to £130m. The shares added 0.4 per cent, or 0.6p, to 147.5p.
Advocacy group Chemring said it has “received a number of significant requests” in recent months. The shares rose 4.6 per cent, or 17p, to 383p.
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