Rentokil Initial PLC (LSE:RTO) was in an upbeat mood after reporting strong growth in revenue in 2022 reflecting the benefits of recent M&A activity, resilient demand and price rises.
"For the full year, notwithstanding the prevailing macroeconomic challenges, we expect continued good underlying trading momentum," said chief executive Andy Ransom in the results statement.
For the 12 months to December 31, 2022, Rentokil reported statutory revenue up 25.6% to £3.71bn from £2.96bn, although pre-tax profit fell 9.1% to £296mln from £325mln due to one-off and adjusting items, and interest related to the Terminix acquisition.
Adjusted operating margin improved 45 basis points to 15.4%, the highest for 20 years, the company said as it unveiled an 18% boost to the full-year dividend to 7.55p from 6.39p.
The FTSE 100-listed firm said it had made excellent progress on integration of Terminix with cost synergy guidance increased to at least US$200mln from US$150mln.
The successful integration of Terminix and ongoing execution of strategy will enable the enlarged group to deliver a highly attractive investment proposition, Rentokil said.
It raised its medium-term organic revenue growth target to at least 5.0% and forecast that group adjusted operating margin for financial year 2023 of around 16.5%, with North America adjusted operating margin of around 19.5%.
Ransom said: “We start the new calendar year with confidence in our plans, both operational and strategic. The group remains on track to achieve mid-teens EPS accretion in FY 23.”