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The Markets
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The Markets
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Proactive UK has moved.
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Business & education services

Rentokil Initial trades well in first quarter despite delayed start to the spring pest season in the US

Arctic blasts have meant that pests have not been so prevalent in the first quarter as in other years but the pest control firm still managed to grow ongoing revenues by 10.8% year-on-year

Pest control and support services group Rentokil Initial PLC (LON:RTO) saw revenue from continuing businesses rise 10.8% year-on-year in the first quarter.

On a constant exchange rates (CER) basis, revenue was up 15.7% from a year earlier at £545.9mln.

READ Deutsche Bank downgrades Rentokil Initial amid fear of overestimated profits​

Year-on-year organic revenue growth in the first three months of 2018 accelerated to 3.2% from 3.1% in the final quarter of 2017, when growth was affected by the impact of a hurricane in September that hit the group's operations in Puerto Rico.

The group said acquisitions had performed well in the quarter and contributed 12.5% to ongoing revenue during the period.

Ongoing revenue in the Pest Control grew by 15.8%, with organic growth of 4.7%.

On the Hygiene side of the business, ongoing revenue rose by 29.3% (1.8% organic), driven by the acquisitions of Cannon Hygiene and CWS Italy.

Ongoing revenue in Rentokil's Protect & Enhance markets declined by 0.1% (-0.3% organic), due to ongoing market weakness in the UK Property Care business, offset by a stronger performance from the French business.

Currency movements have previously been flagged as a concern and the group settled some nerves by maintaining its guidance of a £10-£15mln hit to profits from currency fluctuations over the full year.

"I am pleased with our performance in Q1 and we are well-positioned for another year of successful growth. We are confident that the company will deliver a performance in line with market expectations for 2018," said Andy Ransom, the chief executive of Rentokil.

Shares in the FTSE 100 company were up 2.3% at 279.1p in the first hour of trading.

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