Hygiene services group Rentokil Initial warned that profits were likely to be £10 million short after weaker consumer spending impacted its City Link delivery arm.

The group's shares fell 22% to 114.5p in early trading on Thursday, despite saying that trading at its other divisions remained in line with expectations.

Panmure Gordon analyst Mike Murphy said he was not surprised by the profit warning. 'The management had indicated a weakening market in Q3 and the economic background has deteriorated since,' he said, reiterating a 'sell' rating on the stock.

The stockbroker reduced its forecast for, EBITA from £56.3 million to £46.3 million for the year.

Rentokil marked its return to the FTSE 100 Index in August after two years of
restructuring and efforts to revamp the business to bring it back to growth.

Rentokil's management has been cutting costs, selling off unwanted businesses including its security arm and making acquisitions.