Rentokil Initial, the rat-catching to parcel delivery service that is being run by veterans of former chemicals group ICI, posted a 55.3 per cent fall in first-half pre-tax profit today and gave warning that the current rate of losses would continue for the remainder of the year.

Profits in the first half fell to £39.3 million, on revenues up 4.8 per cent to £1.1 billion, as the group began a long programme to bring the struggling company back to its former glories.

Rentokil said that in textiles and washroom services, it was unlikely that profitability would improve this year in the UK business. The company also said it remained cautious about trading conditions across its central European operations.

The bulk of any improvement in 2009 is likely to come from City Link, its currently loss-making parcel delivery service. Performance improvements in other divisions are likely to be offset by higher interest costs, which Rentokil will incur from refinancing its maturing debt.

Alan Brown, chief executive, said: "We have made a solid start with strong improvement in customer service over the past four months, but we are on a three to five-year journey to profit recovery."

He added: "We have a lot to do and will have to deliver it in increasingly difficult economic circumstances. We need to develop a strong operating framework across our businesses, to empower our branch network within this framework, and to deliver our services much more efficiently."

Rentokil's shares fell 10 per cent at the opening but rallied to 5.76 per cent down at 69.5p in later trading.

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