Rentokil Initial’s troubled delivery business is a big drag on the group’s overall performance, the business services company said on Friday as it warned it was likely to cut its dividend payouts.

City Link, the express parcel delivery business, saw lower revenues and suffered a £15.4m operating loss while its parent reported first-quarter operating profits of £28.7m and profits before tax of £14.6m, down from £54m and £35.4m respectively this time last year.