Rentokil Initial PLC (LSE:RTO) said its North American business had a soft start to the year, with organic revenue growth of just 0.7% in the first quarter.
The pest control group blamed weak lead generation and lower contract sales, particularly across its residential and commercial segments.
The company reported total group revenue of $1.64bn for the three months to 31 March, up 1.5% year-on-year.
Organic revenue growth was 1.8%, although this included a small drag from having one fewer trading day compared to last year.
In North America, the group’s largest region, pest control revenue rose only 0.5%, while overall services across residential, commercial and termite customers fell by 0.2%. Rentokil said subdued inbound interest had continued to hold back performance.
Despite this, the group said customer and colleague retention both improved slightly during the quarter, which it viewed as a positive sign for future growth.
It also noted progress in operational initiatives, with digital lead generation showing signs of recovery in March after a weak February, and technician engagement in sales efforts increasing.
The company said it expects a further boost from its expansion of satellite branches and the launch of a door-to-door sales programme in the second quarter, which will involve around 30 sites.
Outside North America, the international business reported stronger momentum, with organic revenue up 3.3%. Europe, Asia and the Pacific all posted solid growth, though the UK was slower due to tough comparisons with last year’s performance in asbestos remediation.
Overall pest control revenue rose 1.7%, driven by a 4.7% increase in international markets. Hygiene and wellbeing grew 1.6%, while France workwear was up 4.4%.
Rentokil completed six bolt-on acquisitions during the quarter, contributing $13mn in annualised revenue. Chief executive Andy Ransom said the business remains confident in its long-term strategy despite macroeconomic uncertainty, citing recurring revenues and a diversified customer base.