Rentokil Initial has recruited two senior executives from Royal Mail to lead the recovery of itsloss-making UK express delivery business, City Link.
David Smith will join as managing director of the City Link business and Robert Peto as financedirector. Rentokil said both would bring significant experience of the parcel delivery sector,having played leading roles in the turnaround of Royal Mail’s Parcelforce business.
Smith joined Royal Mail Group in 2002, and since the end of 2010 has been chief customerofficer, responsible for the commercial direction of the group’s UK Letters, Parcels andInternational business, and driving an agenda of customer centricity. His previous roles includemanaging director of Post Office Limited and Parcelforce.
Peto joins City Link having served as finance director of Parcelforce since 2006, where he was akey member of the team driving the business turnaround, “improving profitability through robustfinancial and operational management”, Rentokil said. He joined Parcelforce in 2003 as financialcontroller, following nine years at Geopost UK, where his roles included financial controller,International Express financial controller and management accountant for Parceline.
Rentokil CEO Alan Brown, who joined in 2008 with a five-year plan to turn the group around, lastmonth blamed City Link’s widening losses on the difficult parcels market, but predicted performancewould improve in the third quarter of this year. He said a detailed operating plan for all parts ofthe business had been established to address the operating cost base, customer care agenda and IT,and to reduce the use of subcontractors. Shares in Rentokil, which have fallen 6% in the lastmonth, traded up 1.6% yesterday to 96.5 pence, valuing the company at about £1.7 billion, accordingto Reuters.
Operating losses at City Link in the first quarter of this year more than doubled to £10.7million, due to customer losses, lower prices and higher operating costs, although the firm claimedto be making “strong progress” with its latest restructuring plans. Its revenues declined by 13.4%to £72.3 million.
Royal Mail CEO Moya Greene acknowledged that Smith had “made very valuable contributions to thePost Office, Parcelforce Worldwide and the re-alignment of our structure to focus on ourcustomers”. She said a comprehensive search would be undertaken for Smith’s successor, and saidinternal and external candidates would be considered.
