3rd Quarter Results

Rentokil Initial PLC
08 November 2006


8 November 2006


                           RENTOKIL INITIAL PLC (RTO)

            TRADING UPDATE FOR THIRD QUARTER ENDED 30 SEPTEMBER 2006


Highlights



•         Further progress in driving top-line growth and improving customer
          retention

•         Third quarter revenue up 13.7%; organic growth 3.5%

•         Year-to-date revenue up 11.6%; organic growth 3.6%

•         Third quarter operating profit up 1.7%; year-to-date operating profit
          down 5.9%

•         Adjusted operating profit down 10.7% in quarter and 10.0% year-to-date

•         Good progress in restructuring of key businesses

•         Further 16 City Link franchise territories acquired


Note: All comparisons at constant exchange rates and before amortisation of
customer lists.





Commenting on the third quarter, Doug Flynn, Chief Executive Officer of Rentokil
Initial plc, said:



'The actions we have taken have helped to deliver a sixth consecutive quarter of
top-line growth.  In addition, customer retention has improved in every
division.  Our performance in the third quarter, however, also reflects
continued difficult markets in European Textiles and Washroom Services and the
ongoing re-engineering of the UK Washroom business.  More encouragingly, our
other large businesses - Pest Control, City Link and Electronic Security - have
performed largely in line with plan.



'Progress continues to be made on reshaping the businesses which are facing the
biggest challenges. Progress is also being made in developing more efficient
processes in a number of areas.



'Our outlook for the remainder of 2006 and 2007 is unchanged.'






£m                                                               % change                           % change

                                                  Q3 06   Q3 05                  YTD 06    YTD 05
Proforma Continuing Operations1
At 2005 constant exchange rates2

Revenue                                           520.8   457.9     13.7%       1,535.7   1,376.4      11.6%
Operating profit before amortisation of
customer lists3                                    73.1    71.9      1.7%         205.0     217.9     (5.9%)

Add back: one-off items                             0.3    10.3   (97.1%)           6.9      17.5    (60.6%)

Adjusted operating profit4                         73.4    82.2   (10.7%)         211.9     235.4    (10.0%)

Share of profit from associates (net of tax)        0.6     0.4   (50.0%)           1.7       1.7          -

Interest                                         (14.4)  (14.2)    (1.4%)        (35.3)    (41.4)      14.7%

Adjusted profit before income tax4                 59.6    68.4   (12.9%)         178.3     195.7     (8.9%)

Continuing Operations1
At actual exchange rates

Revenue                                           515.9   458.6     12.5%       1,534.5   1,375.7      11.5%

Operating profit before amortisation of
customer lists                                     71.9    72.1    (0.3%)         204.2     217.9     (6.3%)

Amortisation of customer lists                    (6.7)   (5.2)   (28.8%)        (17.1)    (15.5)    (10.3%)

Operating profit                                   65.2    66.9    (2.5%)         187.1     202.4     (7.6%)

Share of profit from associates (net of tax)        0.5     0.4     25.0%           1.6       1.7     (5.9%)

Net interest payable                             (14.5)  (14.2)    (2.1%)        (35.4)    (41.4)      14.5%

Profit before income tax                           51.2    53.1    (3.6%)         153.3     162.7     (5.8%)

Operating cash flow                                                               148.5     217.9    (31.8%)

Free cash flow5                                                                    75.5     107.1    (29.5%)


1All figures are for continuing operations and are unaudited.  The UK linen and
workwear business has been treated as discontinued along with the UK, Canadian,
Belgian and US manned guarding businesses.

2Results at constant exchange rates have been translated at the full year
average exchange rates for the year ended 31 December 2005. £/$ average rates:
Q3 2006 1.8177; FY 2005 1.8217. £/€ average rates: Q3 2006 1.4593; FY 2005
1.4598.

3Before amortisation of customer lists of £17.1m (2005: £15.5m).

4Before amortisation of customer lists of £17.1m (2005: £15.5m) and items of a
one-off nature of £6.9m (2005: £17.5m).  See appendix 4 for further details.  In
Q3 2005, the costs of defending the approach from Raphoe amounting to £8m were
treated as an exceptional item.  In order to improve comparability, these costs
have been reclassified as a one-off item.  This treatment will be adopted in the
2006 financial statements.

5Cash flow before acquisitions, disposals, equity dividend payments and special
pension contribution.




For further information

Shareholder/analyst enquiries:
Andrew Macfarlane, Chief Financial Officer           Rentokil Initial plc     020 7866 3000
Lisa Williams, Head of Investor Relations

Media enquiries:
Malcolm Padley, Head of Corporate Communications     Rentokil Initial plc     07788 978 199
Jon Rhodes, Tom Williams                             Brunswick Group          020 7404 5959

A conference call for analysts and shareholders will be held on 8 November at
9:00am.  To join this call, please dial [phone].  A recording of
the call will be available for 14 days on the following numbers: UK - +44 (0) 20
806 1970, USA - 718 354 1112.  The passcode for both replay numbers is 4593693#.

This announcement contains 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.

OPERATING REVIEW



In all cases, references to operating profit are for continuing businesses
before amortisation of customer lists.  References to adjusted operating profit
and adjusted profit before tax and amortisation (PBTA) also exclude items of a
one-off nature, totalling a net cost of £6.9 million (2005: £17.5 million) that
have impacted the results for the period.  These costs principally relate to
reorganisation and redundancy costs and professional and other costs in the
group centre, offset by the profit on sale of land and buildings and a
curtailment credit following changes to the UK defined benefit pension scheme.
An analysis of these costs by division is provided in appendix 4. All
comparisons are at constant 2005 full year average exchange rates.



Third quarter



Further progress was made in the third quarter against the goal of driving top
line growth.  Revenue for the group as a whole of £520.8 million was 13.7%
higher in the third quarter than the prior year.  Increased revenue was recorded
by all divisions except Textiles and Washroom Services - where revenue was
essentially unchanged - and Other (principally South Africa).  Excluding the
impact of acquisitions, organic revenue growth in the third quarter was 3.5%, up
on the 1.9% reported in the second quarter.  The portfolio grew by 2% in the
period.  Group operating profit of £73.1 million was 1.7% higher than last year.
  However, this is distorted by a net £12.7 million one-off credit in central
items, principally related to a previously announced pension curtailment benefit
of £14.7 million.  Adjusted operating profit, which excludes the impact of
one-off items, declined by 10.7% to £73.4 million.  Adjusted profit before tax
(i.e. before one-off items and amortisation of customer lists) fell by 12.9% in
the third quarter to £59.6 million.  The rate of regression of profit before tax
is greater than that of operating profit due to lower mark-to-market credits in
the interest line in the third quarter of 2006 than last year.



Year-to-date



For the year-to-date, revenue of £1,535.7 million was 11.6% above the same
period last year. Organic revenue growth was 3.6% for the nine months, slightly
ahead of the first half growth of 3.5%. As for the third quarter, revenue was
higher for all divisions except Textiles and Washroom Services and Other. The
portfolio increased by 7.6% over the period.  Operating profit for the group
fell by 5.9% versus last year at £205.0 million, although this was again
distorted by the one-off pension curtailment credit.  Over the course of the
year, the group has made a number of acquisitions to improve market and
strategic positions.  In almost all cases, these acquired businesses have lower
margins than like businesses already in the company.  This mix effect has
therefore contributed to lowering the group's operating margin.  Excluding
one-off items, adjusted group operating profit fell by 10.0%.  Adjusted profit
before tax of £178.3 million was 8.9% behind last year.



Outlook



The outlook for the remainder of 2006 and 2007 is unchanged.  Before one-off
items, the performance of the Textiles and Washroom Services division in the
second half of 2006 is expected to be broadly flat with the first half as a
result of current market and trading conditions.  We anticipate that our other
divisions will demonstrate improving profit trends during the second half (again
before the impact of one-off items).  We continue to expect that the group will
return to modest profit growth in 2007.






DIVISIONAL PERFORMANCE



Textiles and Washroom Services


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:
Portfolio - net movement                             1.9    0.1                      2.6      17.2
Revenue                                            147.8  148.7     (0.6%)         444.0     445.1     (0.2%)
Operating profit (before amortisation of customer   15.6   33.4    (53.3%)          68.7      98.8    (30.5%)
lists)
One-off items                                       11.2    1.2     833.3%          13.4       3.9     243.6%
Adjusted operating profit (before one-off items
and amortisation of customer lists)                 26.8   34.6    (22.5%)          82.1     102.7    (20.1%)



Revenue for the division as a whole was essentially unchanged from last year for
both the third quarter and the year-to-date.  Excluding the impact of
acquisitions, revenue fell by 0.8% in the quarter. Trading conditions in the
European business continued to be challenging, as indicated at the time of the
interim results in August.  Continuing the trends seen in the first half, all
major continental European markets achieved revenue growth with the exception of
the Netherlands.  Revenue growth was under 1% in France and Belgium with Germany
performing a little better than this.  There continues to be strong price
pressure in these countries and it is proving difficult to grow the portfolio.
However, some of the smaller markets such as Spain, Portugal, the Czech Republic
and the Scandinavian countries recorded stronger revenue growth.



As previously notified, in the first part of the third quarter the UK washroom
business was impacted by the loss of customers who had also been users of the
now closed textiles business.  Year-to-date, the portfolio loss associated with
these terminations is some £2 million.  As a result, UK washroom revenues were
down 11.8% in the third quarter compared to last year.  However, the rate of
terminations slowed in September and, encouragingly, new contract wins were
higher in the third quarter than in the first or second quarters, suggesting
that the business is stabilising.



Divisional operating profit was negatively impacted by the trading conditions
described above and by a high level of one-off restructuring costs resulting in
a fall of 53.3% to £15.6 million.  Excluding the effect of one-off items,
adjusted operating profit fell by 22.5%.  In continental Europe, there were
mixed fortunes.  Germany achieved good adjusted operating profit growth due to
reduced losses in its hospital services business and a better run rate in the
textiles business as the benefits of initiatives aimed at reducing processing
costs began to come through.  There were also gains in Belgium, Portugal,
Finland and the Czech Republic.  However, these increases were more than offset
by profit declines, particularly in France and the Netherlands.  In France,
sales force costs and energy costs were both materially higher than in the same
quarter last year.  The Netherlands was affected by a tough pricing environment.
  The energy-related price increases introduced in the summer in a number of
markets have generally stuck and gone some way to mitigating higher energy costs
across continental Europe.  Lower revenues in the UK washroom business, due to
portfolio losses described above, resulted in a significant decline in adjusted
operating profit in that business in the third quarter.



One-off items cost £11.2 million in the quarter, of which £8.7 million relates
to the European business.  Plans have been announced to close three plants in
Germany: Wilmhelmshaven in the north of the country and Freibourg and
Untereisesheim in the south, the latter being part of the hospital services
business which is being exited.  Processing will be transferred to other
existing facilities.  The total cost of these closures is some £6.2 million.  It
is anticipated that they will be completed by the middle of next year and the
estimated saving, including the elimination of hospital services losses, is £3.4
million per year which will be achieved in 2008.



The UK washroom reorganisation continued on track in the third quarter with
one-off cash costs of £1.8 million incurred during the period related to branch
closure costs.  Total one-off costs for 2006 are expected to be £5.8 million
with further costs incurred in the fourth quarter when 87 staff will leave the
business and 13 branches will be vacated. Another £2 million will be incurred in
the first quarter of 2007 as the business moves to 20 branches and relocates its
head office.  Once the branch reorganisation is complete (targeted for March
2007), the cost base of this business will be reduced by some £3 million per
annum compared with the situation in April 2006 when it was still in 35
branches.  This run rate will be achieved by the end of the first half of 2007.
Further steps will be taken in the UK during 2007 which will have the effect of
improving processing efficiency.  Additional profit improvements are expected to
come from better sales and service productivity in 2007 and 2008.



The remainder of the one-off costs incurred in the third quarter relate to a
number of other initiatives, principally in Austria, Germany and Italy.



The serviced garment market is reliant to a significant degree on manufacturing
employment in western Europe.  The market is experiencing a slow but steady
migration of jobs to eastern Europe and other low cost countries which is a key
factor affecting our businesses in this sector.  As a result of this and market
conditions generally, we no longer believe we will meet our target of achieving
a one percentage point increase in margin in the French textiles business in
2006.  However, improving gross margins in this business remains a priority.



As previously announced, the French textiles business, Initial BTB SA, is the
subject of a regulatory inquiry by the French Competition Council.  Rentokil
Initial's policy has been and remains to conduct its business in full compliance
with all applicable competition laws.   BTB intends to co-operate in all
respects with the Council's inquiries.



Pest Control


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:
Portfolio - net movement                             3.0    0.5                     53.0       2.7
Revenue                                             76.4   53.7      42.3%         209.6     157.1      33.4%

Operating profit (before amortisation of customer   19.1   18.2       4.9%          50.9      50.0       1.8%
lists)

One-off items                                        0.6      -          -           2.2         -          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                 19.7   18.2       8.2%          53.1      50.0       6.2%



The Pest Control division recorded its best quarter for some time in terms of
both revenue and profit growth.  Revenue increased by 42.3% in the third quarter
compared to last year.  Excluding acquisitions - principally Ehrlich - revenue
was 2.7% higher.



In continental Europe, all the major pest control markets produced higher
revenue than the same quarter last year, most notably in France, the
Netherlands, Belgium, Germany, Spain and Portugal.  Organic growth rates were
typically over 5%. Revenue again declined in the UK, falling by 2.7%, but the
rate of decline slowed having been 3.2% in the first half.  Revenue was
significantly higher in the USA as a result of Ehrlich, which has performed well
since its acquisition in March.



A 4.9% increase in operating profit was achieved by the division in the quarter
and adjusted operating profit was 8.2% higher than the prior year.  The major
continental European markets all recorded operating profit ahead of last year.
However, operating profit was lower year-on-year for UK pest control as a result
of lower revenue and one-off costs.



Major changes to the structure of the UK business are now underway. The 26
existing branches will be replaced by 42 field based sales and service
operations, 11 regional operations centres and 7 regional administration
centres. Customer service functions will be moved to a new national call centre.
A new specialist team to support high dependency customers, such as in the food
industry, is also to be established.  The business will be de-layered to improve
responsiveness and some 25% of current posts are expected to be made redundant
by the end of the year. The majority of the one-off costs for this programme are
expected to be recognised in the fourth quarter and will amount to some £4-5
million in total which we expect to be recovered in less than three years on
cost savings alone.



The integration of Ehrlich is substantially complete.  Integration costs - which
are not treated as one-off - have totalled £0.6 million and are expected to be
£0.9 million for the full year.  The cost synergies associated with combining
Ehrlich with the existing US pest control business are anticipated to be in the
region of £0.8 million a year and these will start to come through in the first
half of next year.



Tropical Plants


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:

Portfolio - net movement                             1.9    1.8                      2.0       6.5

Revenue                                             24.5   23.4       4.7%          74.3      70.8       4.9%

Operating profit (before amortisation of customer    1.0    1.8    (44.4%)           3.2       4.8    (33.3%)
lists)

One-off items                                        0.3      -          -           0.3         -          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                  1.3    1.8    (27.8%)           3.5       4.8    (27.1%)



Tropical Plants saw revenue grow at 4.7% during the quarter, of which organic
growth was 3.2%.  Revenue was higher than last year in the USA, which accounted
for just over 55% of the division's total revenue in the third quarter.  It also
improved in the Netherlands, Belgium, Canada, Norway and some of the smaller
markets.  However, revenue in the UK and France declined, in both countries due
to a high level of terminations in the first half which impacted the portfolio
and lower jobs work than last year. These businesses continue to be the focus of
performance improvement initiatives.



The USA saw a modest increase in operating profit in the third quarter.
However, this was offset by lower operating profit in almost all of the
division's other markets and an increase in divisional costs as we strengthen
management to address the performance issues.  As a result, operating profit
declined by 44.4% compared to last year and adjusted operating profit fell by
27.8%, a rate consistent with the first half.



 Electronic Security


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:

Portfolio - net movement                             0.3    2.8                      1.3       5.7

Revenue                                             66.7   61.6       8.3%         203.6     188.9       7.8%

Operating profit (before amortisation of customer    9.9    8.9      11.2%          25.4      26.2     (3.1%)
lists)

One-off items                                        0.2      -          -           1.0       0.2     400.0%

Adjusted operating profit (before one-off items
and amortisation of customer lists)                 10.1    8.9      13.5%          26.4      26.4          -



Revenue growth of 8.3% was recorded by Electronic Security in the quarter, of
which 0.9% was organic.  All markets increased revenue in the third quarter
other than the Netherlands, where a small decline resulted from the ongoing
restructuring work in that country.  The UK Fire and Security business, France
and the USA all recorded double digit revenue increases, mostly due to
acquisitions.  UK Systems is beginning to recover from the delay in the start-up
of business already won which was noted in the second quarter but is unlikely to
be able to catch up fully by the year-end.  Portfolio development is
significantly behind last year principally due to an exceptional contract win in
2005 in UK Systems and a lower level of acquisitions in 2006 than 2005.



Operating profit was higher for all businesses compared to the third quarter of
last year, resulting in divisional operating profit up 11.2% and adjusted
operating profit up 13.5%.  The strongest profit growth was achieved by UK Fire
and Security, France and the USA.  The Netherlands produced higher profit
despite lower revenue due to savings accruing from its restructuring programme.



City Link


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:

Revenue                                             44.6   27.0      65.2%         126.4      84.5      49.6%

Operating profit (before amortisation of customer    6.8    6.2       9.7%          20.5      18.6      10.2%
lists)

One-off items                                          -    0.3          -             -       0.3          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                  6.8    6.5       4.6%          20.5      18.9       8.5%



City Link, the parcels delivery business, continued to make progress in the
third quarter.  Revenue was over 65% higher year-on-year.  Excluding the impact
of franchise acquisitions, organic revenue growth was 7.6% in the quarter
compared with an estimated 3-4% market growth in the period.



Operating profit increased by 9.7% in the third quarter and adjusted operating
profit by 4.6%. Year-to-date, integration costs of £0.9 million have been
incurred and absorbed within operating profit.



In the third quarter, a further 16 franchises have been bought in through the
acquisition of four businesses for a total consideration of £25.5 million.
These businesses had revenue of £95 million in the year to completion.
Year-to-date, £50.4 million has been spent on the acquisition programme and City
Link now owns 80% of its network.  The effect on City Link's 2006 revenue of all
the franchises acquired this year is circa £45 million.  The outstanding
franchises are expected to be acquired during the course of 2007.



Facilities Services


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05

At 2005 constant exchange rates:

Portfolio - net movement                            20.5   28.0                     30.5      34.1

Revenue                                            126.6  112.7      12.3%         380.8     339.7      12.1%

Operating profit (before amortisation of customer    6.7    9.7    (30.9%)          21.7      26.5    (18.1%)
lists)

One-off items                                        1.3      -          -           1.4         -          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                  8.0    9.7    (17.5%)          23.1      26.5    (12.8%)



Overall, revenue increased by 12.3% in the third quarter, 10.7% of which was
organic.  This was driven principally by revenue growth in cleaning of some 25%,
whilst medical services and specialist hygiene activities also increased
revenue.  Revenue fell in catering and hospital services reflecting the
difficult conditions in those markets.



In terms of operating profit, the division saw mixed progress in the quarter.
In cleaning, solid performances by the UK and the small Netherlands business
were offset by Spain where the incorrect phasing of provisions for holiday pay
flattered performance in the third quarter of 2005.  The effect will reverse by
the end of the year.  UK catering was boosted by the exit from several school
meals contracts which reduced the level of losses incurred in the traditionally
loss-making third quarter.  Hospital services and medical services were also
slightly behind last year in operating profit terms.



One-off costs of £1.3 million related principally to management changes and
redundancy costs.



Asia Pacific


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:

Portfolio - net movement                             2.2    1.7                     15.5       4.3

Revenue                                             26.3   22.0      19.5%          73.1      66.0      10.8%

Operating profit (before amortisation of customer    5.1    5.6     (8.9%)          14.9      17.0    (12.4%)
lists)

One-off items                                        0.4      -          -           1.2         -          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                  5.5    5.6     (1.8%)          16.1      17.0     (5.3%)



The acquisitions of Pink Healthcare and the CWS branded washroom and dustmat
businesses helped Asia Pacific to a 19.5% increase in revenue in the third
quarter.  All markets increased revenue, with strong growth in Australia, New
Zealand, Singapore, Hong Kong and the Philippines. Excluding the impact of
acquisitions, revenue grew by 4.7% in the quarter, with the strongest organic
growth in Indonesia, Malaysia and the Philippines.  Customer retention rates
continue to improve in a number of markets.



Operating profit was impacted by higher costs associated with building the
divisional management team (which is now substantially complete) and by one-off
reorganisation costs.  Although operating profit was 8.9% lower than last year
in the third quarter, adjusted operating profit was only 1.8% behind, reflecting
increases in Australia, New Zealand and Singapore.  In terms of operating
profit, branch integration costs ahead of the realisation of synergy benefits
and continuing price pressure affected the result of Australian washroom, the
division's largest business, which saw a marginal decline in profit
year-on-year.  New Zealand, Singapore, Hong Kong and Taiwan all had higher
operating profit than last year but profit was lower in the Philippines,
Malaysia and Indonesia.



Other


£m                                                                % change                           % change
                                                   Q3 06  Q3 05                   YTD 06    YTD 05
At 2005 constant exchange rates:

Portfolio - net movement                             0.3  (0.2)                      1.4       1.1

Revenue                                              7.9    8.8    (10.2%)          23.9      24.3     (1.6%)

Operating profit (before amortisation of customer    3.8    3.1      22.6%           9.6       9.4       2.1%
lists)

One-off items                                      (1.0)      -          -         (0.8)         -          -

Adjusted operating profit (before one-off items
and amortisation of customer lists)                  2.8    3.1     (9.7%)           8.8       9.4     (6.4%)



Other is mostly comprised of the group's activities in South Africa.  Revenue
fell by 10.2% in the third quarter.  Operating profit was 22.6% higher than last
year, however excluding the impact of one-off credits related to discontinued
profits, adjusted operating profit fell by 9.7%.






Central items


£m                                                                  % change                           % change
                                                    Q3 06   Q3 05                   YTD 06    YTD 05

Central (costs)/net credit                            5.1  (15.0)                    (9.9)    (33.4)

One off items - costs/(credits)                    (12.7)     0.8                   (11.8)       5.1

2005 bid defence costs reclassified as one off                8.0                                8.0

Adjusted central costs (before one-off items)       (7.6)   (6.2)                   (21.7)    (20.3)



Central costs in the third quarter and year-to-date have been significantly
impacted by one-off items.  In 2006, these mainly relate to the recognition in
September of the pension curtailment credit of £14.7 million resulting from the
closure of the UK defined benefit scheme to future accrual.  In 2005, £8.0
million of bid defence costs were incurred; at the time these were treated as
exceptional but have now been reclassified as one-off to bring the treatment
into line with that now followed for such non-recurring items.



One-off items



At the half year, guidance was given that one-off costs in the second half would
be in the range £15-20 million, before reflecting the UK pension scheme
curtailment credit of £14.7 million.  We have made better progress than
anticipated with our improvement plans in European Textiles and Washroom
Services, which led us to recognise costs of £8.7 million the third quarter.
The bulk relates to laundry rationalisation in Germany.  These costs were
expected to fall in 2007.  We now expect second half one-off costs to be in the
range £25 million to £30 million before the pension credit.



Cash flow



Year-to-date, operating cash flow, which combines the results of continuing and
discontinued activities, was £69.4 million below the same period last year at
£148.5 million (2005: £217.9 million).  The primary cause is the £77.9 million
reduction in EBITDA (total operating profit before depreciation and
amortisation) reflecting the disposal of Style Conferences and the Manned
Guarding businesses and the high level of non-cash items in current year
operating profit.  The working capital outflow was £37.6 million higher than
last year, impacted by the timing of routine pension payments in 2006 and
payments made on the disposal of surplus properties, together with the pension
curtailment credit taken to profit.  However, net capex cash flows were £46.1
million below last year reflecting the disposal of Style Conferences and Manned
Guarding together with the proceeds for disposal of properties within the closed
UK linen and workwear business. Lower tax and interest payments partly offset
the year-on-year operating cash flow reduction to leave free cash flow £31.6
million below last year at £75.5 million (2005: £107.1 million).








                                                                      Appendix 1

ANNUAL CONTRACT PORTFOLIO - CONTINUING BUSINESSES



3 Months to 30 September 2006
                                                                               Net
£m at constant 2005                                 New                  Additions/
exchange rates                       1.7.06    Business   Terminations   Reductions   Acquisitions    30.9.06
Textiles & Washroom Services          564.8        12.5         (13.3)          1.5            1.2      566.7
Pest Control                          211.7         8.6          (7.6)          1.8            0.2      214.7
Tropical Plants                        85.1         2.2          (2.3)          0.7            1.3       87.0
Electronic Security                   100.2         1.9          (2.6)          0.3            0.7      100.5
Facilities Services*                  361.7        24.6          (7.3)          3.2              -      382.2
Asia Pacific                          128.4         4.6          (4.0)          0.6            1.0      130.6
Other                                  28.9         1.2          (1.2)          0.3              -       29.2
TOTAL                               1,480.8        55.6         (38.3)          8.4            4.4    1,510.9




9 Months to 30 September 2006
                                                                                Net

£m at constant 2005                                 New                  Additions/
exchange rates                       1.1.06    Business   Terminations   Reductions   Acquisitions    30.9.06
Textiles & Washroom Services          564.1        40.2         (43.7)          4.5            1.6      566.7
Pest Control                          161.7        23.7         (23.5)          5.7           47.1      214.7
Tropical Plants                        85.0         6.6          (8.5)          2.5            1.4       87.0
Electronic Security                    99.2         6.4          (8.1)          1.9            1.1      100.5
Facilities Services*                  351.7        43.1         (23.4)         10.8              -      382.2
Asia Pacific                          115.1        13.3         (12.5)          2.7           12.0      130.6
Other                                  27.8         3.1          (3.2)          1.5              -       29.2
TOTAL                               1,404.6       136.4        (122.9)         29.6           63.2    1,510.9


* Includes net adjustment of £89.6 million at 1 January 2006 for the removal of
catering, which is no longer considered to be a portfolio business.



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 textiles and washroom 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 an element of
inter-company revenue.



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 a 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.


                                                                      Appendix 2

Divisional Analysis (at constant exchange rates)
(based upon the way businesses are managed)

                                                   3 months to   3 months to   9 months to   9 months to
                                                  30 September  30 September  30 September  30 September
                                                          2006          2005          2006          2005
(at 2005 constant exchange rates)                           £m            £m            £m            £m
                                                   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Business Analysis

Revenue
Textiles & Washroom Services                             147.8         148.7         444.0         445.1
Pest Control                                              76.4          53.7         209.6         157.1
Tropical Plants                                           24.5          23.4          74.3          70.8
Electronic Security                                       66.7          61.6         203.6         188.9
City Link                                                 44.6          27.0         126.4          84.5
Facilities Services                                      126.6         112.7         380.8         339.7
Asia Pacific                                              26.3          22.0          73.1          66.0
Other                                                      7.9           8.8          23.9          24.3
Continuing operations at 2005 constant exchange
rates                                                    520.8         457.9       1,535.7       1,376.4
Exchange                                                 (4.9)           0.7         (1.2)         (0.7)
Continuing operations at actual exchange rates           515.9         458.6       1,534.5       1,375.7

Operating Profit*
Textiles & Washroom Services                              15.6          33.4          68.7          98.8
Pest Control                                              19.1          18.2          50.9          50.0
Tropical Plants                                            1.0           1.8           3.2           4.8
Electronic Security                                        9.9           8.9          25.4          26.2
City Link                                                  6.8           6.2          20.5          18.6
Facilities Services                                        6.7           9.7          21.7          26.5
Asia Pacific                                               5.1           5.6          14.9          17.0
Other                                                      3.8           3.1           9.6           9.4
Central Items                                              5.1        (15.0)         (9.9)        (33.4)
Continuing operations at 2005 constant exchange
rates                                                     73.1          71.9         205.0         217.9
Exchange                                                 (1.2)           0.2         (0.8)             -
Continuing operations at actual exchange rates            71.9          72.1         204.2         217.9
Adjusted Operating Profit**
Textiles & Washroom Services                              26.8          34.6          82.1         102.7
Pest Control                                              19.7          18.2          53.1          50.0
Tropical Plants                                            1.3           1.8           3.5           4.8
Electronic Security                                       10.1           8.9          26.4          26.4
City Link                                                  6.8           6.5          20.5          18.9
Facilities Services                                        8.0           9.7          23.1          26.5
Asia Pacific                                               5.5           5.6          16.1          17.0
Other                                                      2.8           3.1           8.8           9.4
Central Items                                            (7.6)         (6.2)        (21.7)        (20.3)
Continuing operations at 2005 constant exchange
rates                                                     73.4          82.2         211.9         235.4
Exchange                                                 (1.2)           0.2         (0.8)             -
Continuing operations at actual exchange rates            72.2          82.4         211.1         235.4


*  Before amortisation of customer lists.

** Before amortisation of customer lists and items of a one-off nature (see
   appendix 4 for further details).


                                                                      Appendix 3

Divisional Analysis (at actual exchange rates)
(based upon the way businesses are managed)


                                                   3 months to   3 months to   9 months to   9 months to
                                                  30 September  30 September  30 September  30 September
                                                          2006          2005          2006          2005
(at actual exchange rates)                                  £m            £m            £m            £m
                                                   (unaudited)   (unaudited)   (unaudited)   (unaudited)
Business Analysis

Revenue
Textiles & Washroom Services                             146.6         147.6         444.2         444.4
Pest Control                                              75.6          53.9         209.8         157.1
Tropical Plants                                           24.0          24.2          74.5          70.8
Electronic Security                                       66.5          61.7         203.7         188.9
City Link                                                 44.6          27.0         126.4          84.5
Facilities Services                                      126.5         112.6         380.8         339.7
Asia Pacific                                              25.5          22.7          72.5          66.0
Other                                                      6.6           8.9          22.6          24.3
Continuing operations at actual exchange rates           515.9         458.6        1534.5       1,375.7

Operating Profit*
Textiles & Washroom Services                              15.3          33.4          68.7          98.8
Pest Control                                              18.9          18.2          50.9          50.0
Tropical Plants                                            1.1           1.8           3.3           4.8
Electronic Security                                        9.9           8.9          25.4          26.2
City Link                                                  6.8           6.2          20.5          18.6
Facilities Services                                        6.7           9.7          21.7          26.5
Asia Pacific                                               4.8           5.8          14.5          17.0
Other                                                      3.3           3.1           9.1           9.4
Central Items                                              5.1        (15.0)         (9.9)        (33.4)
Continuing operations at actual exchange rates            71.9          72.1         204.2         217.9

Adjusted Operating Profit**
Textiles & Washroom Services                              26.5          34.6          82.1         102.7
Pest Control                                              19.5          18.2          53.1          50.0
Tropical Plants                                            1.4           1.8           3.6           4.8
Electronic Security                                       10.1           8.9          26.4          26.4
City Link                                                  6.8           6.5          20.5          18.9
Facilities Services                                        8.0           9.7          23.1          26.5
Asia Pacific                                               5.2           5.8          15.7          17.0
Other                                                      2.3           3.1           8.3           9.4
Central Items                                            (7.6)         (6.2)        (21.7)        (20.3)
Continuing operations at actual exchange rates            72.2          82.4         211.1         235.4


*  Before amortisation of customer lists.
** Before amortisation of customer lists and items of a one-off nature (see
   appendix 4 for further details).





                                                                      Appendix 4



One-off Items


                                                    3 months to   3 months to   9 months to   9 months to
                                                   30 September  30 September  30 September  30 September
                                                           2006          2005          2006          2005
                                                             £m            £m            £m            £m
                                                    (unaudited)   (unaudited)   (unaudited)   (unaudited)

Textiles & Washroom Services                             (11.2)         (1.2)        (13.4)         (3.9)
Pest Control                                              (0.6)             -         (2.2)             -
Tropical Plants                                           (0.3)             -         (0.3)             -
Electronic Security                                       (0.2)             -         (1.0)         (0.2)
City Link                                                     -         (0.3)             -         (0.3)
Facilities Services                                       (1.3)             -         (1.4)             -
Asia Pacific                                              (0.4)             -         (1.2)             -
Other                                                       1.0             -           0.8             -
Central Items                                              12.7         (8.8)          11.8        (13.1)
                                                          (0.3)        (10.3)         (6.9)        (17.5)



Note: All numbers at both actual and constant exchange rates.





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