Trading Statement

Rentokil Initial PLC
26 May 2005


News Release

                                                                   26th May 2005

             TRADING UPDATE FOR THE FOUR MONTHS TO 30TH APRIL 2005


Financial Summary
                              
     Trading                  for the four months was largely as expected. The 
                              year-on-year impact of the significant P&L 
                              investments, which have been previously announced, 
                              as well as the ongoing challenges of a difficult, 
                              price competitive market place, have led to a 
                              deterioration in trading results

     Turnover                 from continuing operations increased by 1.8% at 
                              constant 2004 average exchange rates

     Profit Before Tax and    from continuing operations, on a comparable 
     Amortisation of          provisional IFRS basis, declined by 16.5% at 
     Customer Lists           constant 2004 average exchange rates        

     Contract Portfolio       increased by an annualised £38.3m at constant 2004 
                              average exchange rates

     Operating Cash Flow      was in line with the company's expectations

     Acquisition Spend        year-to-date, has been c. £33m on fourteen 
                              acquisitions

2005 TRADING AND PROSPECTS

Ahead of today's Annual General Meeting, Brian McGowan, non-executive Chairman
said:-

'In trading terms, the year has started off largely as expected, with a
deterioration in profits compared with the first four months of 2004. This was
due to the full effect of the significant increases in the investment in sales,
marketing, service, I.T. and H.R. which were progressively fed in from May 2004
as well as the ongoing challenges of a difficult, price competitive market
place. These trends are likely to continue into the second half.

Most of the segments with a contract portfolio dimension have a number of
business units which are starting to show progress but, in overall terms, these
have not yet produced the scale and consistency to make a noticeable difference
to the size and shape of the overall contract portfolio.

The benefits of the investments made should start to come through progressively
as the second half of 2005 unfolds, although the board remains of the view that
the year as a whole is likely to give a weaker performance than in 2004.

The board restates its intention, in the absence of unforeseen circumstances, to
recommend an increase in the dividend for 2005 of a further 10% to 7.38 pence
per share'.

SEGMENTAL COMMENTARY - CONTINUING OPERATIONS

(All at constant 2004 average exchange rates. Segmental operating profit is on a
comparable provisional IFRS basis and before central overheads and amortisation
of customer lists)

Hygiene

Total Hygiene turnover grew by 2.4% with operating profit down by 11.3%.

Hygiene Services turnover was up by 2.2% with operating profit down by 11.5%.
Contract portfolio net gain was £17.2m, with £11.1m of this coming from
acquisitions.

     Within the total turnover, washroom was flat, garments increased by
     3.2%, floorcare and linen each increased by 2.1%, whilst other hygiene
     grew by 10.4%.

     Turnover grew by 2.7% in continental Europe and by 4.9% in Asia, Pacific
     and Africa, whilst North America was flat.

     In the UK, turnover was flat, although operating profit was significantly 
     lower as management continued to re-organise the business by separating the 
     washroom and floorcare activities from those of linen and garments.

Pest Control turnover was up by 3.2% with operating profit down by 10.9%.
Contract portfolio net gain was £2.0m, including £0.2m from acquisitions.


     Including the limited benefit of acquisitions, turnover in North America
     and Asia, Pacific and Africa grew by 16.9% and 7.9% respectively.
     Continental Europe increased by 2.6%, whereas the UK regressed by 1.1%.

     Security

Total Security turnover increased by 4.4% whilst operating profit fell by 11.3%.

Electronic Security turnover grew by 6.7% with operating profit declining by
6.7%. Contract portfolio net gain of £1.5m of which £1.3m came from
acquisitions.

     Assisted by acquisitions, turnover in continental Europe and the UK 
     increased by 7.1% and 6.4% respectively, whilst the embryonic US business 
     produced organic growth of 6.5%.

Manned Guarding turnover increased by 2.7% whilst operating profit fell by 25.1%
with the UK, in particular, where we have recently changed the managing
director, experiencing tough market conditions, compounded by the lead up to
guard licensing. The contract portfolio showed an organic increase of £6.6m, all
of which was organic.

     Continental Europe and the UK produced similar levels of turnover growth at 
     4.8% and 5.2% respectively, whereas North America was flat.

Facilities Management

Total Facilities Management turnover fell by 1.3%, with operating profit falling
by 11.4%.

Facilities Management Services turnover fell by 2.6%, the growth in continental
Europe, Asia, Pacific and Africa and North America failing to compensate for a
3.8% decline in the core UK business. In very competitive market conditions
operating profit fell by 11.5%. The contract portfolio grew by £8.2m without any
benefit from acquisitions.

Tropical Plants turnover grew by 3.8%, whilst operating profit fell by 10.6%.
Contract portfolio net gain of £3.8m was largely as a result of acquisitions.

     All four geographic regions showed turnover growth, specifically North
     America 6.3%, Asia, Pacific and Africa 3.5%, the UK 1.0% and continental
     Europe 0.8%.

Conferencing had an operating profit decline of 11.5% on flat turnover, January,
in particular, being very poor with a very slow build-up after the Christmas/New
Year break. More encouragingly, subsequent months have shown an improvement,
with April much improved on the first quarter. The contract portfolio declined
by £1.0m, albeit this does not include a major contract signed with BMW which,
however, will not generate billings until 2006.

Parcels Delivery

Following the disposal of the business in Zimbabwe (see below), turnover in the
UK business increased by 1.7%, with operating profit falling by 14.5% due, like
Conferencing above, to a very slow January compounded by pressure on rates,
reduced demand in the I.T. and mobile phone sectors and the continuing trend of
an increasing proportion of non-premium, next-day consignments.

OTHER ITEMS

Contract Portfolio. The annualised value of the contract portfolio for
continuing operations (based upon unaudited, pro-forma management information)
increased by £38.3m in the four month period with £16.1m of this coming from
acquisitions.

Acquisitions. In the four month period to 30th April eleven acquisitions were
made at a total cost of c. £23m. Since 1st May a further three acquisitions have
been made for c. £5m. Aggregate annualised turnover from these fourteen
acquisitions in Hygiene, Security and Tropical Plants in the UK, Continental
Europe, North America and Asia, Pacific is estimated at c. £23m. The largest
single acquisition was that of a leading textile services company in Austria
with annualised turnover of c. £11m, this being some four times the size of
Rentokil Initial's existing business in that country. In addition to the above,
£5.0m has been spent to buy out a minority shareholding in the French textile
services business.

Disposals. Agreement has been reached on the sale of a portion of the loss
making hospital textiles business in Germany with 2004 turnover of c. £7m
(representing some 40% of the activity). We continue to review the future of the
remaining 60% of the activities in this sub-segment. Within UK Hygiene,
negotiations for the disposal of the linens and garments activities are ongoing.
Since 1st May the company has sold its parcels delivery business in Zimbabwe,
this business having generated turnover in 2004 of some £4.0m.

Operating Cash Flow has been in-line with our expectations.

New Holding Company. The company is currently on course to complete the
formation of the new holding company by the original target date of 1st July
2005. As previously indicated, this process is subject to shareholder approval
at meetings to be held immediately following the AGM on 26th May.

International Financial Reporting Standards (IFRS). As previously indicated, we
continue to make good progress on the transition to IFRS. There are no further
significant developments to report in this area at this stage, other than an
improved understanding of the potential effects of the current interpretations
of IAS 39, particularly in the context of 'mark to market' adjustments,
including those in respect of the option element of the Ashtead convertible loan
note.

We expect to present a full reconciliation between the 2004 first half and full
year UK GAAP results and the IFRS adjusted results early in the second half of
2005, prior to the scheduled 2005 interim results announcement, which will be on
a full IFRS basis.

                                      END

Note - the above statement is made based upon unaudited management accounts,
produced on a provisional IFRS compliant basis (but excluding IAS 39 'Financial
Instruments: Recognition and Measurement' and other 'mark to market'
adjustments) and using the average rates of exchange for foreign currencies for
the year 2004, as used in the 2004 Annual Report.


For further information

R C Payne, Finance Director                                   01342 833022
                                                 
C D Grimaldi, Corporate Affairs Director                      01342 833022

G Ackers, Brunswick Group LLP                                 020 7404 5959

Alex Mackey, Catullus Consulting                              07773 787458


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