Market Report: Rentokil edges up despite concerns over City Link

The Square Mile's patience with Rentokil Initial is running out. The multi-tasking firm – whose services range from rat catching to cleaning bathrooms – has long been dogged by the performance of its City Link business. Yet although boss Alan Brown is now claiming the troubled courier unit is about to see an improvement, that has not been enough for him to escape harsh words from those who think it is time to let it go.

"Talk is cheap, time for action," said Jefferies' Justin Jordan, who attacked "management procrastination in retaining its conglomerate structure" and claimed that the major disappointment from Rentokil's first-quarter results last week was "the lack of clear strategic thinking on exiting City Link."

While the analyst admitted the state of the market was "not ideal" for such a move, he argued that although the unit providing just 12 per cent of revenues, it was proving a "key impediment to non-holders investing in its shares".

He is not the only one concerned by City Link. While Mr Brown used Friday's update to suggest the business would come close to breaking even over the second-half of the year, JP Morgan Cazenove's scribblers were more cautious, claiming "Rentokil often promises a brighter outlook only to disappoint regularly at results".

Nonetheless, Rentokil still edged up 0.35p to 83.5 as Mr Jordan decided it was no longer worth investors selling following the recent fall in the group's share price.

After Friday's sell-off, the FTSE 100 started the day looking fairly steady despite the weekend's political events on the continent. However, by the bell increasing fears over Greece meant the benchmark index was 100.51 points worse off at 5,554.55 – a new low for 2012.

A dive in metal prices meant the miners were generally weak, including ENRC which was knocked back 6p to 514p despite the Kazakh group's announcement a spin-off was one option being considered as a way to boost its value.

Having disappointed the market last week with its announcement it was plugging and abandoning a well off the shore of Ghana, Tullow Oil was moved higher by some rather better news. The explorer shot up 48p to 1,517p after revealing on Monday that it had found more oil in its Ngamia-1 well in Kenya.

So impressive was the discovery Jefferies' Brendan Warn said that, if it wasn't for the group's previous successes, the result would have "company maker potential".

There was rather less positivity around BP, which dropped 7.15p to 415p. With the energy giant's trial over the Gulf of Mexico disaster now not taking place until next year, BarCap's analysts decided to turn sellers, saying they "believe the chance of a swift resolution with the Department of Justice is reduced" while they "increasingly see BP as dead money" on an investment horizon of 12 months.

Invensys may have finished last week on a downer, but punters weren't ready to give up on their takeover hopes around the engineer quite yet.

With bid rumours – which have made a recent return – continuing to swirl, the group moved above 223p before finishing the day 10.5p higher at 213.2p to top the FTSE 250.

Industrial turnaround firm Melrose (12.3p weaker at 412.8p) became the latest name to be suggested by gossips as a potential bidder, although City voices were not convinced by the idea.

Meanwhile, some hopeful traders were wondering whether Invensys' full-year results next week could bring some news on its large pension deficit, seen as a major barrier to possible suitors.

However, not everyone was optimistic while analysts recently have talked down the possibility of the liability being sorted out anytime soon.

A trip round WH Smith doesn't sound like a great way to spend a day, but it pleased Espirito Santo. After getting a tour of one of the retailer's West London shops, the broker said it was "impressed by what we saw" although this was not enough to stop the group - led by Kate Swann, pictured - falling 6.5p to 511.5p.

Down on Aim, explorer Bahamas Petroleum spurted up 1.38p, or 17 per cent, to 9.55p after the country's Prime Minister Hubert Ingraham – who reportedly said he would ban drilling – was ousted in the weekend's election.

Elsewhere, the news that it had suspended work at its Cambay-76H well in India following a number of mechanical mishaps prompted Oilex shares to plummet by 4.75p to 11p.

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