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City Link's continued improvement in customer service was not enough to combat the general economic downturn in Q3: its turnover fell 13.2% year-on-year to £94.4m, while its previous year's operating profit of £11.4m became a £12m loss.

For the nine months to September, City Link's turnover stands at £284.7m, down 8.3% on a year ago, while the previous year's operating profit of £32.8m now stands at a £41.4m loss. However, customer service levels in Q3 were above target and ahead of Q2  at 98.7%.

Q3 turnover was down 2.9% compared with Q2, "which we believe to be the result of generally weakening demand," according to Alan Brown, chief executive of Rentokil Initial, City Link's parent. He also notes that the Q3 2007 result was buoyed by the postal strike.

He reveals that while trading with seven of City Link's top 10 customers "remains well ahead of last year, the majority of customers are trading below last year. We anticipate the seasonal trading spike will occur very late in Q4 as consumers defer decisions on spending as long as possible".

Since the start of the year, City Link has reduced headcount by 1,000 to 6,600 and reduced its fleet by 10% "without compromising service", says Brown, realising annualised savings of £25m. It has also improved its cash collection.