Rentokil Initial, the rat-catching to parcel delivery services group, has admitted that, while the economic downturn is affecting business, it continues to be hampered by problems within its control.

The group reported that pre-tax profits for the three months to the end of September had fallen by 72 per cent to £16.6 million, compared with same period last year. Revenues remained steady at £562.4 million.

The company said that it had maintained revenues at 2007 levels despite "an economic backdrop of intense and heightened anxiety about global recession", but its performance continued to be affected by its track record.

"Group profitability continues to be adversely affected by a number of factors largely within the group's own control, although the worsening economy is beginning to impact new contract sales within a number of businesses," it said.

Rentokil has issued four profit warnings in the past year. A new executive team, made up of veterans from ICI, the chemicals group taken over by Akzo Nobel, was announced in March this year, and the management launched a five-year turnaround plan for the company.

In August Alan Brown, the chief executive, refused to rule out a rights issue after first-half profits fell 72 per cent and the dividend was cut by more than 70 per cent.

Rentokil's UK washrooms service, which installs and maintains facilities for businesses, performed particularly poorly in the third quarter. The group said "historic poor service" meant that debt collection remained a significant problem in the division: it ran up a loss of £7.2 million after adding another £6 million to its bad debt provisions. UK washrooms revenue fell by 14.3 per cent.

City Link, the company's courier and parcel delivery service, also struggled. The group said a "significant loss of small customers" at the end of 2007 and the beginning of this year pushed revenues down 13.2 per cent.

Rentokil has made cuts at City Link in anticipation of waning demand for its services. Staff numbers have been reduced by 1,000 to 6,600, and the vehicle fleet has been reduced by over 10 per cent. The group said that by the end of the year City Link vehicle and staff costs will have been cut by £25 million compared with April 2008, but that the impact of the measures would not be felt until next year.

In early trading, shares in Rentokil climbed 7.5 per cent to 50.25p.

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