Rentokil Initial PLC (LON: RTO) on Thursday said ongoing revenue rose 10.2% in the third quarter, and the pest control and support services company said it’s on course to meet its full-year targets.
Separately, the UK’s Competition and Markets Authority said it has provisionally found that Rentokil’s purchase of Cannon Hygiene could lead to higher prices or lower quality for some customers.
Third-quarter figures
The FTSE 100 company said revenue from continuing businesses came in at £637.4mln on a year-on-year basis.
On a constant exchange rates (CER) basis, ongoing revenue increased 11.8%, of which 4.1% was organic revenue growth and 7.7% stemmed from acquisitions.
Andy Ransom, Rentokil’s chief executive, said: “I am pleased with the performance of the group in the third quarter. We continue to successfully deploy our market-leading innovations and digital applications to our customers and to execute our value-creating M&A programme, and we remain on track to meet expectations for the full year.”
The group said ongoing revenue in the Pest Control business increased by 11.4%, aided by good performances from both growth and emerging markets. Favourable weather in Europe and the UK supported an increase in sales.
Looking at its Hygiene operations, ongoing revenue rose by 22.0% (2.8% organic), aided partially from the acquisitions of Cannon Hygiene and CWS Italy.
Ongoing revenue in Rentokil's Protect & Enhance markets rose by 0.7% (0.7% organic), owing to improvements in France Workwear and Ambius, which provides interior landscaping services.
But ongoing market weakness continued to hurt the performance of Rentokil’s UK Property Care business during the third quarter, but at an improved rate of decline compared to the first half, the company said.
CMA on Rentokil/Cannon Hygiene tie-up
In a separate release, the CMA said after an in-depth Phase 2 investigation of Rentokil’s purchase of Cannon Hygiene that it’s concerned there could be reduced competition in the supply of washroom waste-disposal services for customers that require a single provider across the whole or a large part of the UK. Rentokil and Cannon are two of the three major suppliers at this level, said CMA, alongside the largest supplier, PHS.
The CMA is inviting comments on its provisional findings until November 8 and will seek comments up until November 1 on its remedies notice.
That notice “outlines measures the CMA could take if it finally decides that there has been a substantial lessening of competition. This includes the potential sale of the Cannon UK business,” said CMA.