Delivery volumes at Rentokil Initial PLC's (RTO.LN) troubled parcels unit City Link Monday were up 5% year-on-year, suggesting that the business is on target to become profitable in the fourth quarter.

The company delivered 400,000 parcels Monday, the peak day for online shopping in the pre-Christmas rush. It delivered 1.2 million parcels last week.

The figures support Rentokil's forecast for City Link to return to profit in the fourth quarter, and stay profitable for 2010, said head of corporate communications Malcolm Padley.

Rentokil is undergoing a three- to five-year restructuring program after the performance of its City Link business sparked several profit warnings and a change of management.

Separately, Schroders Investment Management Ltd. raised its stake in the company from 13% to 14% after recent share price weakness. At 1146 GMT, Rentokil's shares traded down 3 pence, or 3%, at 98 pence.

-By Anita Likus, Dow Jones Newswires; +44 20 7842 9407; anita.likus@dowjones.com
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