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Rentokil Initial

Rentokil Initial says trading started well across its businesses in the first quarter of 2019

In a trading update, the FTSE 100-listed firm reported an 8.9% increase in ongoing revenue at actual exchange rates to £603.6mln for the first quarter

Pest killers
Rentokil said 4.0% of that total was organic revenue growth, while 4.9% was from acquisitions

Rentokil Initial PLC (LON:RTO) said trading has started well across its businesses in the first quarter of 2019, with strong growth in ongoing revenue helped by acquisitions.

In a trading update, the FTSE 100-listed firm reported an 8.9% increase in ongoing revenue at actual exchange rates to £603.6mln for the first quarter.

READ: Rentokil Initial must offer proposals to address CMA concerns regarding takeover of MITIE's pest control unit

The company noted that 4.0% of that total was organic revenue growth, up from 3.2% at the same stage in 2018, while 4.9% was from acquisitions.

Rentokil said ongoing revenue in its Pest Control business grew by 12.0%, with good performances being delivered across both growth and emerging markets, which rose by 12.1% and 11.5% respectively. 

It added that Hygiene also made a very positive start to the year, with ongoing revenue growth of 7.2%, while ongoing revenue in its Protect & Enhance markets was in line with the first quarter of 2018.

The group signed eight acquisitions in the first quarter of 2019, four in Pest Control - primarily in North America and Latin America - and four in Hygiene, with combined annualised revenues of around £29mln in the year prior to purchase. 

The company added that its guidance for M&A spend in 2019 remains in the range of £200mln to £250mln.

Rentokil also said that good progress is being made towards a bulk annuity insurance 'buy-in' for its UK Defined Benefit Pension scheme and it now anticipates a pre-tax cash surplus of around £40mln will be returned to the company on completion in early 2020. 

Andy Ransom, Rentokil’s chief executive commented: "We have had a good start to 2019 and I'm pleased with our performance in the first three months of this year.  I am confident of another year of successful growth for the Company, in line with market expectations."

Quick facts: Rentokil Initial

Price: £4.44

Market: LSE
Market Cap: £8.21 billion
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