The last financial accounts for Target Express before its acquisition by Rentokil Initial shows losses increased to £29m due to interest charges being repaid to a private equity firm. Rentokil bought Target debt free in December 2006 for £210m, boosting its position in the parcels market to fourth, behind DHL, TNT and UPS.
Since then it has been undergoing integration with the Rentokil brand City Link, which will be completed at the end of this year. For the year ending 30 April 2007
Target Express Holdings increased its turnover by £18m to £164m, but sustained pre-tax losses of £29m, compared with £26m in 2006.
City Link sales and marketing manater Stuart Godman says: "The way the deal was struck there was a lot of debt. There was a pre-tax loss because all the interest charges relating to the debt were repaid to 3i. Operating margins were 13% so it is a healthy business." Godman adds: "By the end of 2008 we will be operating as a sole business. We are definitely on plan, botin where we want to be but also in time scale."
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