Exterminators have their way at Rentokil

Rentokil has been doing some spring cleaning of its own - it's replaced its senior management team...

Last Updated: 01 Aug 2013

Rentokil Initial, which these days does everything from cleaning to pest control, has seen its share price tank since issuing two profits warnings recently. Now it’s brought in three former ICI executives to try and reverse its decline, while CEO Doug Flynn and chairman Brian McGowan will be on their bikes with immediate effect. Only three weeks ago, Flynn was insisting he wouldn’t resign – clearly he’s been encouraged to have a change of heart....

Rentokil’s new management team are credited with turning around ICI, the British chemicals company that was sold to Dutch rival Akzo Nobel for £8bn last year. John McAdam, the former ICI boss, becomes chairman of Rentokil, while finance director Alan Brown has been appointed CEO and Andy Ransom given the lofty title of ‘executive director of corporate development'  (let’s hope he can fit that on his business cards).

McAdam joined ICI when it bought Unilever’s Speciality Chemicals Companies in 1997, and was appointed chairman and CEO of ICI Paints a year later. By 2003 he was running the whole group, and during his tenure managed to increase ICI’s value by more than 600%. OK, so it was in a pretty bad way when he took over, but that’s still pretty good going (even if it does still seem a bit strange to us that they're getting so much credit for flogging a British institution like ICI - 30 years ago they would have been locked up for it).

But although the three men might have done a sterling job at ICI, they’ve got a big challenge on their hands to save the ailing Rentokil. The City wants the conglomerate divided up into its constituent parts – which also includes all sorts of other weird and wonderful things from parcel delivery to workwear. And on the face of it, it does seem a bit hard to see the benefit of housing a pest control operation and a tropical plant business under the same roof (the name ‘Rentokil’ doesn’t exactly scream leafy greenery to us, we must admit).

However, director Peter Long is adamant that the board won’t let vulture funds break up the business. ‘I'm not interested in talking to bottom feeders who think that they can buy some of the parts of Rentokil on the cheap,’ he told the Times today. And the good news is that with the credit markets in their current parlous state, most of the private equity firms who would otherwise have been sniffing around wouldn’t be able to raise the cash to bid at the moment.

So McAdam and co should have a smooth road ahead for the time being...

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