City Link cut losses by a third ahead of sale to Better Capital

City Link cut its first quarter losses by more than a third but remained loss-making ahead of its sale to turnaround investor Better Capital.

The parcel carrier cut its first quarter adjusted operating loss by 36% to £8.1m (2012: £12.7m) during the first three months of 2013.

Former parent Rentokil Initial’s first quarter results also revealed that the operator’s turnover was slightly down at £72.7m (2012: £73.5m).

Rentokil Initial chief executive Alan Brown said City Link’s results were “in line with Q4 2012 performance”.

City Link revealed earlier today that it had been sold to Better Capital for £1, in a deal that will see the new owner invest £40m in the parcel carrier.

City Link MD Dave Smith, who will remain with the firm, said: “My message to our customers would be that while in the short term it is business as usual, very quickly we will start to see the access to new capital, and the expertise Better [Capital] bring to bear, accelerating the investment and improvements we are making in our customer experience.”

Alan Brown added: “From Rentokil Initial’s perspective, we have decided to divest of City Link at this stage of the turnaround so that we can concentrate on our core international services businesses in pest control, hygiene and workwear.”