Rentokil Initial PLC (LSE:RTO) surged 9% to 442.4p after its third-quarter update showed stronger-than-expected organic growth, easing concerns about the pace of recovery in its US pest control business.
Revenue rose 4.6% to $1.81bn in the quarter, with organic growth accelerating to 3.4%, up from 1.6% in both the first and second quarters.
Pest Control, which makes up more than 80% of group revenue, delivered 3.3% organic growth, driven by improved performance in North America and solid gains internationally.
North American pest services, a key area of investor focus, grew 1.8% organically after barely expanding earlier this year.
Peel Hunt said the improvement reflected “better sales execution and stronger digital marketing,” while Rentokil’s cost-efficiency programme and branch expansion plans remain on track. Hygiene & Wellbeing, which accounts for the rest of the business, grew 3.0% organically.
Management said full-year results should meet expectations. Peel maintained its 'hold' rating and 352p target price, noting the stock still trades at a roughly 50% discount to peers Rollins and Elis.