Hays rules out Rentokil as bid target

Hays, the logistics and personnel company, yesterday distanced itself from recent speculation that it would bid for Rentokil Initial, the pest control to cleaning group.

Hays, the logistics and personnel company, yesterday distanced itself from recent speculation that it would bid for Rentokil Initial, the pest control to cleaning group.

Reporting full-year results yesterday, which saw pre-tax profits rise 14 per cent to £268.4m, for the year ended 30 June, the company said Rentokil was not a target.

Ronnie Frost, chairman of Hays, said: "We provide hi-tech integrated solutions to our customers and we're looking to move further up the value-added chain. We make about £10,000 profit per employee, compared with £3,500 to £4,000 at Rentokil. That is not to say that Rentokil is not a quality company, but it is not a Hays type of business."

Rentokil, which had a higher market value than Hays just two years ago, has been downgraded by the City since it missed its historic earnings targets last year. It is now seen as a bid target and has been linked with Hays over the summer, as both companies offer outsourced services.

The Hays results yesterday showed group margins slip from 14 per cent to 13 per cent. However, the figures were well received in the City and the shares closed up 12.5p at 403p.

Robert Morton, an analyst at WestLB Panmure, said: "The company continues to present itself as ahead of the curve. The prospects for the next two or three years look very strong."

Hays, which is seeking to extend its offering of outsourced support services ever deeper, announced that it had won contracts from several police forces to provide software to analyse data on crime. The software will allow the police, which include London's Metropolitan force, to pick up crime trends better.

The company also said it was a member of a consortium that seeks to "revolutionise" the Land Registry process. The project would seek to computerise the Land Registry's files, speeding up property searches, from the current several weeks, to days, or even hours.

Hays said it now had 100 consultants working in its "Fourth Party Solutions" business, which offers to manage complex outsourcing projects - overseeing the "third party" undertaking this work. It said it was currently negotiating its first contracts for the division, with three large European multinationals.