Trading Statement

Rentokil Initial PLC
03 November 2005



3 November 2005

RENTOKIL INITIAL plc - THIRD QUARTER TRADING UPDATE


£m
                                                Q3 05      Q3 04       % change        YTD 05     YTD 04       % change
At 2004 constant exchange rates:

Revenue                                         559.5      531.5           5.3%       1,670.6    1,612.5           3.6%

Operating income before central costs*           88.7       95.9         (7.5%)         256.3      283.0         (9.4%)

Operating income after central costs*            80.6       88.5         (8.9%)         227.6      265.9        (14.4%)

At actual rates of exchange:

Revenue                                         564.8      529.8           6.6%       1,678.9    1,607.9           4.4%

Operating income                                 67.3       82.4        (18.3%)         175.7      248.2        (29.2%)

Operating income analysed as:

  • Operating income (before
    amortisation of customer list &              
    exceptional items)                           81.3       87.9         (7.5%)         229.2      264.8        (13.4%)

  • Amortisation of customer lists              (6.0)      (5.5)         (9.1%)        (17.5)     (16.6)         (5.4%)

  • Exceptional items                           (8.0)          -                       (36.0)          -


Share of profit after tax from associates         0.4        0.4              -           1.7        1.3          30.8%

Net interest payable                           (14.4)     (15.1)           4.6%        (41.7)     (37.6)        (10.9%)

Pre-tax profit (continuing operations)           53.3       67.7        (21.3%)         135.7      211.9        (36.0%)

All figures are for continuing operations and are unaudited and unreviewed.
Style Conferences and the US cleaning business have been treated as
discontinuing/discontinued businesses respectively and their results have been
excluded from the current and prior year figures above. Results at constant
exchange rates have been translated at the full year average rates for the year
ended 31 December 2004.



  • Q3 revenue up 5.3% over prior period and up 3.6% year-to-date at constant
    exchange rates; sales up in all business segments
  • Rate of profit deterioration slowing - at constant exchange rates business
    segment operating income* (ie before central costs) down 7.5% in Q3 vs last
    year and 9.4% lower year-to-date; H1 decline was 10.5%
  • Portfolio up 7.6% (annualised rate) in Q3 with better sales growth and
    lower terminations than H1
  • Business improvement projects on track
  • Business re-organised into six divisions to face its markets more
    effectively
  • Recruitment of top management team now complete
  • Capital structure review completed

*Before amortisation of customer lists and exceptional items



Commenting on third quarter performance and outlook, Doug Flynn, Chief
Executive, said:

'We have made significant progress in reshaping Rentokil Initial for the future,
instituting detailed turnaround plans for a number of important business
operations, re-organising the group into six market facing divisions and
completing the recruitment of the top management team to take the business
forward.  We have also concluded how best to manage our capital structure for
the short- and medium-term. Much hard work remains ahead of us and we are
realistic about the time it is likely to take to turn this company around.
However, as I said at the interim results, we know what the problems are and
believe we have the tools to return the company to the top of its sector.

'Trading in the third quarter showed a continuation of the positive trends
evident towards the end of the first half. Revenue increases were achieved
across the board. The rate of decline in operating income slowed in many areas,
although most progress was made in lower margin activities and our largest
business, hygiene services, has yet to show improvement. The rate of margin
regression also decelerated and margins were higher in all businesses in the
third quarter than the first half. The investment put in place to improve sales
efficiency and customer service is gradually taking effect and we were pleased
to see some successes in the quarter, including an improvement in customer
retention for UK pest control.

'Despite tough economic conditions in a number of our markets, we expect to see
a continuation of these encouraging trends in the remainder of the year and into
the first half of 2006.  Thereafter, we anticipate a gradual acceleration in the
rate of improvement as our initiatives begin to take full effect. We remain on
track to deliver the promises made at our interim results presentation.'

STRATEGIC AND OPERATIONAL TURNAROUND

Whilst in the first half we focused on analysing the nature and scale of the
problems we face, during the third quarter our priorities have been to develop
and then implement plans to put things right. There have been three main areas
of work.

Operational turnarounds

Turnaround plans have been developed for five of our most important operations
and these have now been embedded in those businesses. In most cases the
implementation phase of the turnaround has commenced and will continue into
2006. At constant rates, these plans affect operations representing some 35% and
51% of the group's revenue and operating income (before amortisation of customer
lists and exceptional items) respectively.

UK Pest Control: the principal issue is to reduce unacceptably high customer
termination rates by improving service levels, as dissatisfaction with service
is the prime cause of contract losses.

UK Washrooms: this business requires wide scale restructuring which will take
time. Cost efficiencies will be obtained through merging the old Rentokil and
BET washroom businesses. The separation from the UK textiles business has until
now hindered this programme.

French Textiles: the functional (rather than branch-based) operating structure
which has been successful in our other Continental European textile businesses
is being introduced into France.

European Washrooms & Textiles: the old BET and Rentokil businesses have not been
fully integrated and a plan is currently underway to accelerate this process.

In addition, over time Initial City Link, the parcels delivery business, will
cease to operate on a franchised basis. This should deliver better returns to
shareholders and improve customer service.

Group reorganisation

On 1 September the group was reorganised into the six divisions detailed at the
interims. We believe this structure will enable our businesses to face their
markets and customers more effectively.

Management team

The senior management team who will lead the company forward is now in place.
During the third quarter, our new CFO, HR Director and Corporate Development
Director all took up their posts and other new appointments, most notably the
managing directors of the Asia Pacific and Pest Control/Plants divisions, were
announced. The latter follows the decision of Ted Brown to retire from the
group.

The actions associated with these three areas - formulating the turnarounds,
reorganising the group and assembling the management team - are now largely
complete and provide the necessary foundations for the remaining high priority
projects.



GROUP PERFORMANCE

Note: in all cases references to operating income are for continuing businesses
before amortisation of customer lists and exceptional items.

Third quarter

Revenue for the group in the third quarter increased by 5.3% at constant
exchange rates and 6.6% at reported exchange rates to £564.8 million. Each of
the business segments achieved revenue growth in the quarter versus last year.
Operating income, however, declined by 8.9% at constant exchange rates and by
7.5% at reported exchange rates. At constant exchange rates, increases in manned
guarding and facilities management services were offset by declines in the other
businesses. Actual pre-tax profit for the quarter fell by 21.3% to £53.3
million. The decreases in profit are largely attributable to: the investment
made to improve sales efficiency and customer service; one-off costs associated
with the business turnarounds; higher fuel costs spread across the group; and
exceptional costs incurred in respect of the approach from Raphoe. The
additional investment in sales and service only started to be incurred during
the third quarter of last year but is now fully in place, adversely affecting
the period-on-period comparison. This will continue to be the case in the fourth
quarter with a diminishing effect thereafter.

Nine months to date

Year-to-date, group revenue increased by 3.6% at constant exchange rates and by
4.4% at reported exchange rates with increases recorded by all segments other
than facilities management services, which declined by 0.5%. Operating income
for the period fell by 14.4% at constant exchange rates and 13.4% at reported
exchange rates with declines registered across the board. Actual profit before
tax for the year-to-date fell by 36.0% for the reasons given above together with
an exceptional asset impairment charge in the first half related to the planned
exit from the UK linen and garments business and exceptional costs in respect of
the Raphoe defence.





SEGMENTAL PERFORMANCE

Note: all comparisons are at constant (December 2004) exchange rates. All
references to operating income are for continuing businesses before amortisation
of customer lists and exceptional items. Please refer to appendix 1 for
segmental analysis of revenue and operating profit for the third quarter and
year-to-date at both constant and actual exchange rates. Although the group
management structure was reorganised as of 1 September, the following analysis
has been presented in line with the previous segmental reporting format.

Hygiene


Hygiene Services


Hygiene Services comprises our washrooms and textiles businesses. Revenue in the
third quarter was 2.7% higher than the same quarter last year whilst operating
income was 12.0% lower.

In Continental Europe, trading conditions remained difficult in the third
quarter as a result of limited economic growth and the adverse impact of strong
competition on demand and pricing. There has been a marginal decline in the
portfolio over the quarter. Continued investment in the salesforce is generating
good revenue growth in the German textiles business and in a number of washroom
businesses including Portugal, Spain and Switzerland. In the French textiles
business, which had revenues of £150.3 million at constant exchange rates for
the nine month period and which is the subject of one of our major performance
improvement programmes, the rate of profit decline is reducing as the benefits
of the new operating structure begin to appear. In Belgium, the textiles
business performed strongly in the quarter as improvements in productivity
helped to reduce costs. The Dutch textiles business is suffering from the
continued difficult economic and trading environment in that country. This has
led to lower profits than the same quarter last year and a reduction in the
portfolio. The Austrian textiles business, which was acquired in the first half
of 2005, continues to perform well.

Good progress has been made with the integration of the Continental European
washroom activity into the management structure of the textiles business and is
expected to be substantially complete by the end of this year. The principal
benefit should come from the additional revenue which can be generated from
cross-selling and range extension.


Trading performance in the UK was adversely impacted by a number of factors
which resulted in revenue, margins and the portfolio all declining in the third
quarter compared with the prior year. The costs of separating the washroom and
textiles elements of the business are a drag on margins, as are the increased
levels of investment in sales and service and higher fuel and energy costs. In
addition, competitors exerted downward pressure on pricing and prior year
national minimum wage increases also had an impact. Although the portfolio
continued to decline in the combined textiles and washroom business in the
quarter, the discrete washroom specialist businesses did show portfolio growth.

Discussions continue with a number of parties related to our exit from UK linen
and workwear. It has proven a complex task because of competition issues for
some prospective parties, the need for investment before transfer for others and
the importance of continuing supply to our customers.



We have moved to an alternative approach and do now have expressions of interest
in both garment services and supply and linen services although as yet they are
not binding. We anticipate making a further announcement regarding our exit from
this business by the end of the year.


Pest Control


Revenue for the pest control business was some 2.6% higher year-on-year in the
third quarter whilst operating income declined by 10.5% over the same quarter
last year. The contract portfolio showed a net gain of £1.1 million during the
quarter, of which £0.9 million resulted from organic portfolio growth.


With year-to-date sales of £51.5 million, the UK is our largest pest control
business and is implementing a major performance improvement programme.
Particular progress was made during the quarter as terminations fell by 9.9% in
absolute terms compared to last year and were 3% better than the second quarter.
However, revenue in the UK fell in the quarter due to lower job sales, as did
operating income, reflecting the high operational leverage in the business. In
Continental Europe, where economic conditions are tough in most markets, revenue
was up but operating income down due to margin pressure following higher
investment in sales and service. Nevertheless, there was good growth in Belgium,
The Netherlands, Portugal, Spain, Switzerland and Finland. North America saw
growth in both revenue and operating income, partly as a result of acquisitions.
In Asia Pacific and Africa, revenue in the quarter was higher in all regions
except Fiji, although higher sales and service spend resulted in a decline in
operating income.

Security

Electronic Security

Revenue grew by 8.7% in the third quarter compared to the same period last year
but operating income declined by 2.1%.

All parts of the business recorded higher revenue in the third quarter compared
with the prior year. This was as a result of higher levels of both ad hoc/
project work and contractual work. Operating income performance was, however,
mixed. The decline in operating income for the segment as a whole was largely
due to the performance of the UK fire and security business, which was impacted
by a greater mix of lower margin CCTV work, together with a lower incidence of
call-out revenue through a more reliable equipment base. This business has yet
to realise the full benefits of additional investment in its sales efforts.
Conversely, the UK systems business and operations in France, The Netherlands
and USA showed operating income improvements due to higher volumes which offset
pricing pressure in the market. The portfolio for the segment as a whole showed
progress in the quarter due principally to new business, including an important
contract gain with a major client.

A programme to improve the productivity and efficiency of the electronic
security business in The Netherlands has commenced.

Manned Guarding

A good performance in the third quarter resulted in revenue increasing by 12.8%
over the prior year and operating income growing by 10.0%.

Revenue and operating income increases were recorded across all regions of
operation. The US business benefited from a small mid-year acquisition. Canada
enjoyed significant profitable temporary work in the third quarter and saw a
positive impact from price increases implemented in the Eastern region. The UK
gained a significant amount of new business in the quarter with customer
retention improving. Licensing-related price increases were implemented. New
business wins also fuelled growth in Belgium.


Facilities Management Services


Revenue for the segment rose by 3.1% in the third quarter compared to the same
period last year whilst operating income grew by 10.7%.


Amongst the larger businesses within this segment, UK Cleaning moved ahead
strongly in the third quarter and was a key factor in the encouraging
performance of the segment as a whole. Major contract gains had a positive
impact on revenue and there were fewer major contract losses than last year. In
Spain, revenue was higher than the previous year due to increased jobs in Madrid
and aircraft cleaning work in Mallorca but operating income fell due to lower
margins on re-tendered work.

The catering business reported higher revenue in the third quarter. However,
margins fell in the education sector due to the lower take-up of school meals
following recent publicity regarding school meals in general. This business is
also seasonally affected by school summer holidays. Revenue and operating income
increased for catering to business and industry due to new business gains.

Tropical Plants

Overall, revenue was 5.2% higher in this segment than the same quarter last year
but operating income was 3.8% lower.

In the USA, third quarter revenue declined versus last year due to lower
outright sales of plants which offset an increase in contractual revenue; this
was also reflected in lower operating income. In the UK, quarter-on-quarter
revenue declined, as a result of weaker one-off sales of plants.

In Continental Europe, recent acquisition activity in Belgium and The
Netherlands has bolstered revenue with the added benefit of introducing new
sales management in these businesses. New management has also been recruited for
Denmark. Asia Pacific and Africa revenue in the quarter is above last year. New
Zealand continues to grow strongly and the regression in Australia has
moderated.

Parcels Delivery

Initial City Link revenue increased by 7.1% in the third quarter versus last
year but operating income was 4.8% lower.

Higher revenue was a result of a 5.7% increase in the number of parcels carried
compared with the third quarter of 2004. Pricing pressure, coupled with
substantial fuel price increases, impacted margins and caused operating income
to fall. Additional investment in sales has successfully delivered growth in the
overall network and resulted in higher margins in the third quarter than in the
first half.

We have concluded that, longer term, Initial City Link's franchise model will be
a constraint on the strategic development of the business. Accordingly, we
announced on 25 October that we will cease franchising and will offer to buy
back the remaining franchises.

Conferencing

Style Conferences has been treated as a discontinuing business for the purpose
of this update. The sale process remains on track and we continue to expect
proceeds in excess of £300 million. We do not expect to pay tax on the disposal
proceeds.



FINANCIAL ITEMS

Central Items

Third quarter central costs were largely in line with the prior year with the
net increase primarily due to organisational changes. Central costs for the nine
months were £11.6 million higher than 2004 due to the formation costs of the new
holding company, costs associated with the business review and additional
divisional, IT, HR, acquisition and IFRS transition costs. Of the £11.6 million
increase, some £9 million can be viewed as non-recurring.

Interest

Net interest payable in the third quarter includes an adjustment of £1.4 million
for IAS 19 pension costs following a re-assessment of the IAS 19 pension
liabilities at December 2004 and June 2005 (see note on pensions below).
Excluding this adjustment, net interest payable for the quarter was £2.1 million
lower than 2004 mainly due to the net exchange effect of foreign currency
denominated loans.

Exceptional Items

The company has incurred considerable expense in relation to the unwelcome
approach by Raphoe. We were put into an offer period and then subsequently
threatened with an EGM. As is necessary in such circumstances, the company
engaged a full team of professional advisors, inevitably at some cost. The Board
was unanimously of the view that the proposals, such as they were, were not in
the best interests of shareholders and had prepared a vigorous defence, in
conjunction with the team of advisors. In the event that a bid had emerged, or
an EGM been called, our costs would have been in the order of £20 million.
Raphoe and Robinson went through the deadline imposed by the Takeover Panel
without making a bid or requisitioning an EGM and some £10 million in fees was
incurred, of which an estimated £8 million relates to the period to 30
September. This has been recognised as an exceptional item in the third quarter
and the balance will be reflected in the results for the fourth quarter.

Pensions

The UK defined benefit scheme accounts for substantially all of the group's
pension deficit. The UK scheme's actuaries continue to work on the end March
2005 valuation. Their latest view is that the UK pension scheme deficit is
higher than the initial estimate. A better estimate is that the group's
retirement benefit liabilities, on an IAS 19 basis, at 30 June 2005 and 31
December 2004 would have been £323.7 million and £304.8 million respectively.
This compares with the £283.7 million and £269.8 million that was previously
reported.

Following the recent implementation of the Pensions Act, the company has started
discussions with the trustees about measures to deal with the deficit and the
equity and other risk exposures in the UK scheme. The Pensions Regulator will in
future require companies to deal with scheme deficits over shorter time periods
than in the past and our discussions with the trustees reflect this.

Discussions between the company and trustees are continuing and it is hoped that
they can be concluded by the end of the year. The likely outcome is that the
company will make a very significant contribution to the scheme in the
short-term, with the balance of the funding deficit addressed over a number of
years.

Dividend

It remains our intention, in the absence of unforeseen circumstances, to
recommend an increase in the total dividend for 2005 of 10%. Thereafter, and on
the assumption that the cash resources are available, our intention is to
increase the dividend in line with the medium-term trend in underlying earnings.
However, in the short-term, we may take a more cautious approach to dividend
growth until it is clear that the recovery in the business is well established
and broadly based.


Acquisitions

Although a number of Rentokil's businesses face challenges, other parts of the
group are stable with strong management teams and have attractive opportunities
to grow by acquisition. We will continue to focus our portfolio of businesses
through both acquisition and divestments, and it is important that we have the
financial flexibility to do so. We will only undertake an acquisition when we
have the management capacity to execute a post acquisition plan and it is
clearly strategically and financially attractive to do so.


Credit rating and capital structure

Our current credit rating of BBB+ from Standard and Poor's is on CreditWatch.
Subject to future conditions in the debt markets, in the medium-term we expect
to continue to target a stable BBB+ rating as we believe that this strikes an
appropriate balance between an efficient capital structure (as represented by a
low weighted average cost of capital), liquid access to the capital markets and
reasonable pricing.

However, in the immediate future, we believe that our business and financial
profile may not be consistent with our medium-term target, albeit no worse than
BBB flat.

The combination of our high payout ratio, and the requirement to fund the
pension deficit over the short to medium-term, means that in our view the group
does not currently have surplus capital which could be returned to shareholders
if a minimum BBB credit rating is to be maintained with an appropriate degree of
headroom to avoid further ratings pressure.




This announcement contains certain statements that are or may be forward-looking
regarding the group's financial position and results, business strategy, plans
and objectives. Such statements involve risk and uncertainty because they relate
to future events and circumstances, and there are accordingly a number of
factors which might cause actual results and performance to differ materially
from those expressed or implied by such statements.




A conference call for analysts and shareholders will be held at 9:00am GMT
today. You can access this call on [phone].




Shareholder/analyst enquiries:

Andrew Macfarlane, CFO                             01342 833022

Lisa Williams, IR Manager                          01342 833022


Media enquiries:

Kate Miller/John Sunnucks, Brunswick Group LLP     020 7404 5959


Notes for editors:

Rentokil Initial is one of the largest business services companies in the world,
operating in all the major economies of Europe, North America, Asia Pacific and
Africa. The company has some 90,000 employees providing a range of support
services in over 40 countries where the 'Rentokil' and 'Initial' brands have
come to represent innovation, deep expertise and consistent quality of service.
Services include pest control, tropical plants, hygiene services, facilities
services, electronic security and parcels delivery.



APPENDIX 1 - SEGMENTAL ANALYSIS


Segmental Analysis - constant rates                          3 months to     3 months to     9 months to     9 months to

                                                            30 September    30 September    30 September    30 September

                                                                    2005            2004            2005            2004
(at 2004 full year average exchange rates)                            £m              £m              £m              £m
                                                            (unaudited &    (unaudited &    (unaudited &    (unaudited &
                                                             unreviewed)     unreviewed)     unreviewed)     unreviewed)
Business analysis

Revenue

Continuing operations at 2004 average exchange rates:

Hygiene Services                                                   188.6           183.6           564.4           549.1
Pest Control                                                        59.3            57.8           173.1           168.2
Hygiene                                                            247.9           241.4           737.5           717.3

Electronic Security                                                 63.7            58.6           194.5           179.8
Manned Guarding                                                     88.7            78.6           255.9           239.4
Security                                                           152.4           137.2           450.4           419.2

Facilities Management Services                                     105.9           102.7           319.8           321.4
Tropical Plants                                                     26.3            25.0            78.4            74.3
Facilities Management                                              132.2           127.7           398.2           395.7

Parcels Delivery                                                    27.0            25.2            84.5            80.3

Total continuing operations at 2004 average exchange               
rates                                                              559.5           531.5         1,670.6         1,612.5

Exchange                                                             5.3           (1.7)             8.3           (4.6)

Continuing operations at actual average exchange rates             564.8           529.8         1,678.9         1,607.9


Operating Income *

Continuing operations at 2004 average exchange rates:

Hygiene Services                                                    39.7            45.1           118.3           132.1
Pest Control                                                        19.7            22.0            54.7            61.1
Hygiene                                                             59.4            67.1           173.0           193.2

Electronic Security                                                  9.2             9.4            27.0            29.1
Manned Guarding                                                      3.3             3.0             8.7             9.5
Security                                                            12.5            12.4            35.7            38.6

Facilities Management Services                                       8.3             7.5            21.8            23.3
Tropical Plants                                                      2.5             2.6             7.3             7.8
Facilities Management                                               10.8            10.1            29.1            31.1

Parcels Delivery                                                     6.0             6.3            18.5            20.1

Total Business Segments                                             88.7            95.9           256.3           283.0

Central Items                                                      (8.1)           (7.4)          (28.7)          (17.1)

Total continuing operations at 2004 average exchange                
rates*                                                              80.6            88.5           227.6           265.9

Exchange                                                             0.7           (0.6)             1.6           (1.1)

Continuing operations at actual average exchange rates*             81.3            87.9           229.2           264.8


* Before amortisation of customer lists and items identified as exceptional




Segmental Analysis - actual rates                            3 months to     3 months to     9 months to     9 months to

                                                            30 September    30 September    30 September    30 September

                                                                    2005            2004            2005            2004
(at actual exchange rates)                                            £m              £m              £m              £m
                                                            (unaudited &    (unaudited &    (unaudited &    (unaudited &
                                                             unreviewed)     unreviewed)     unreviewed)     unreviewed)
Business analysis

Revenue

Continuing operations at actual average exchange rates:

Hygiene Services                                                   190.2           182.3           568.7           546.0
Pest Control                                                        59.9            57.5           174.2           167.5
Hygiene                                                            250.1           239.8           742.9           713.5

Electronic Security                                                 63.8            58.4           195.0           179.3
Manned Guarding                                                     91.0            78.8           257.7           239.4
Security                                                           154.8           137.2           452.7           418.7

Facilities Management Services                                     106.1           102.6           320.2           321.1
Tropical Plants                                                     26.8            25.0            78.6            74.3
Facilities Management                                              132.9           127.6           398.8           395.4

Parcels Delivery                                                    27.0            25.2            84.5            80.3

Continuing operations at actual average exchange rates             564.8           529.8         1,678.9         1,607.9


Operating Income *

Continuing operations at actual average exchange rates:

Hygiene Services                                                    40.2            44.7           119.4           131.3
Pest Control                                                        19.8            21.9            55.0            60.9
Hygiene                                                             60.0            66.6           174.4           192.2

Electronic Security                                                  9.1             9.4            27.0            29.1
Manned Guarding                                                      3.4             3.0             8.8             9.5
Security                                                            12.5            12.4            35.8            38.6

Facilities Management Services                                       8.3             7.5            21.8            23.3
Tropical Plants                                                      2.6             2.5             7.4             7.7
Facilities Management                                               10.9            10.0            29.2            31.0

Parcels Delivery                                                     6.0             6.3            18.5            20.1

Total Business Segments                                             89.4            95.3           257.9           281.9

Central Items                                                      (8.1)           (7.4)          (28.7)          (17.1)

Continuing operations at actual average exchange rates*             81.3            87.9           229.2           264.8


* Before amortisation of customer lists and items identified as exceptional




APPENDIX 2 - ANNUAL CONTRACT PORTFOLIO (CONTINUING BUSINESSES)

3 Months to 30 September 2005
                                                                                       
                                                          New                          Net

£m at constant 2004                       1.7.05      Business   Terminations    Additions/    Acquisitions     30.09.05

average exchange rates                                                          Reductions


Hygiene Services                          715.2          17.8         (19.9)           0.9            0.4          714.4
Pest Control                              185.3           8.0          (8.2)           1.1            0.2          186.4

Total Hygiene                             900.5          25.8         (28.1)           2.0            0.6          900.8


Electronic                                 93.0           4.1          (2.2)           1.0          (0.1)           95.8
Manned Guarding                           326.3           8.9         (10.9)           0.8              -          325.1

Total Security                            419.3          13.0         (13.1)           1.8          (0.1)          420.9


Facilities Management Services            369.4          33.0          (8.5)           5.5              -          399.4
Tropical Plants                            91.9           2.6          (3.2)           0.9            1.5           93.7

Total Facilities Management               461.3          35.6         (11.7)           6.4            1.5          493.1


TOTAL                                   1,781.1          74.4         (52.9)          10.2            2.0        1,814.8




9 Months to 30 September 2005
                                                                                       
                                                         New                           Net

£m at constant 2004                     1.1.05      Business   Terminations     Additions/      Acquisitions    30.09.05

average exchange rates                                                          Reductions


Hygiene Services                         695.7          56.7         (57.2)            6.9           12.3          714.4
Pest Control                             181.8          24.8         (25.4)            4.3            0.9          186.4

Total Hygiene                            877.5          81.5         (82.6)           11.2           13.2          900.8


Electronic                                90.0           7.9          (7.2)            2.8            2.3           95.8
Manned Guarding                          301.6          35.8         (30.4)            2.1           16.0          325.1

Total Security                           391.6          43.7         (37.6)            4.9           18.3          420.9


Facilities Management Services           360.1          60.5         (33.3)           12.1              -          399.4
Tropical Plants                           87.1           8.0          (9.8)            2.8            5.6           93.7

Total Facilities Management              447.2          68.5         (43.1)           14.9            5.6          493.1


TOTAL                                  1,716.3         193.7        (163.3)           31.0           37.1        1,814.8






Notes



Contract Portfolio Definition:

Customer contracts are usually either 'fixed price', 'as-used' (based on volume)
or mixed contracts. Contract portfolio is the measure of the annualised value of
these customer contracts.

Contract Portfolio Valuation:

The contract portfolio value is typically recorded as the annual value from the
customer contract. However, in some cases - especially 'as-used' (based on
volume) and mixed contracts, estimates are required in order to derive the
contract portfolio value. The key points in respect of valuation are:

'As-used' contracts: These are more typical in Hygiene Services, where elements
of the contract are often variable and based on usage. Valuation is based on
historic data (where available) or forecast values.

Income annualisation: In some instances, where for example the underlying
contract systems cannot value portfolio, or there is a significant 'as-used'
element, the portfolio valuation is calculated using an invoice annualisation
method.

Inter-company: The contract portfolio figures include approximately £30 million
of inter-company revenue, of which a significant proportion relates to UK
textiles.

Job Work and Extras: Many of the contracts within the contract portfolio include
ad hoc and or repeat job work and extras. These values are excluded from the
contract portfolio.

Rebates: The contract portfolio value is gross of customer rebates. These are
considered as normal part of trading and are therefore not removed from the
portfolio valuation.

New Business: represents new contractual arrangements in the period, which can
either be new contracts with an existing customer, or with a new customer.

Terminations: represent the cessation of either a specific existing customer
contract, or the complete cessation of business with a customer, in the period.

Net Additions / Reductions: represents net change to the value of existing
customer contracts in the period as a result of changes (either up or down) in
volume and/or pricing.

Acquisitions: represents the valuation of customer contracts obtained from
acquisitions made in the period.




                      This information is provided by RNS
            The company news service from the London Stock Exchange