Rentokil banks on CFO Michael Murray to pull group out of doldrums

Pest control and sanitation giant Rentokil is pinning its faith on its new head beancounter, Michael Murray, to haul the group out of the doldrums as the board waved goodbye to the last of its old guard directors on the cusp of a deep recession.

The group announced Murray as its new chief financial officer at the end of November, moving swiftly to plug the vacuum left by the resignation of his predecessor Andrew Macfarlane. News of Macfarlane’s departure came about a week after the group revealed in early November that Q3 2008 pre-tax profits had slumped by 72% year-on-year to £16.6m.

Murray hails from performance measurement services provider GSL, bought by security contractor group G4L in December, and will leave his role as group finance director there to start at Rentokil on 5 January 2009. Prior to that position he served as CFO for TNT Express based in Amsterdam.

First on his to-do list will be to help lead the company’s plan to revive “operational excellence”, one of three key goals set out in its board review last March – in other words, to drive growth and financial performance.

Macfarlane is due to step down on 31 December, but won’t officially walk away from Rentokil until he completes a handover period in February, coinciding with the company presenting its 2008 preliminary results.

Rentokil’s chief executive Alan Brown – the ex-ICI CFO who himself only joined last April – credited him with “ensuring that the company has secure credit facilities in place” in the two years he worked there.

Macfarlane is the last executive member of Rentokil’s incumbent board to go after former chairman Brian McGowan departed last March. ICI’s chief executive John McAdam joined as Rentokil’s chairman and the chemical giant’s general counsel Andy Ransom joined as its executive director of corporate development

Profit warnings
Rentokil issued four profit warnings in 2008, but the company says it is now focused on cash generation and that it would not review its full-year 2008 forecast.

“We are now focusing strongly on cash and on accounts receivable in particular, where we have made some progress. We have also extended the maturity of our financing facilities by raising £125m of new five-year money during Q3 and we have sufficient funding in place to support our plans,” said Brown. “Our guidance for 2008 remains unchanged.”

The company appointed two finance heads as non-executive directors last year in William Ricker, Lazard’s London chief executive and its global deputy chairman, and Richard Burrows, Governor of the Bank of Ireland.