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Trading statements

Rentokil sales boosted by acquisitions

19 April 2017 07:24

Rentokil reported ongoing revenue increased by 10% in its first quarter, of which 3.1% was organic sales growth (Q1 2016: 2.8%, FY 2016: 3%) and 6.9% was from acquisitions.

On 16 December 2016, the company announced the proposed transfer of its workwear and hygiene businesses in Germany and the Benelux to a joint venture (JV) with Haniel.

The transaction remained on track to complete by mid-year, subject to competition clearance.

Excluding those businesses transferring to the JV the organic revenue growth rate was 3.5%.

Pest control grew by 19.1% (5.6% organic revenue growth) while hygiene revenues rose by 3.7% (3.1% organic revenue growth).

Ongoing revenue growth in Rentokil's emerging and growth markets was strong, increasing by 24.5% and 12.6% respectively.

Its businesses in manage for value markets delivered ongoing revenue growth of 2.5% while those in the protect and enhance markets delivered in line with last year.

There was a continuing strong performance in Asia, Pacific, Latin America, the UK and in our largest market, North America.

Europe delivered improved ongoing revenue growth in the first quarter, with revenues in France broadly flat year on year.

M&A

Rentokil acquired 12 businesses this year to date, ten in pest control, one in hygiene and one in property care, principally in emerging and growth markets.

Combined annualised revenues of the businesses acquired totalled £101.7m in the 12 months immediately prior to acquisition.

In February, the firm announced the acquisition of Atlanta-based pest control company Allgood Pest Solutions. The business generated annualised revenues for the 12 months prior to acquisition of $26.6m.

In March, Rentokil completed the transaction to create a joint venture with PCI Pest Control (PCI), India's largest pest control company, which offered a comprehensive range of pest control services and products through its countrywide network.

Rentokil, which had management control of the JV, was integrating its Indian operations into the JV and the combined business has revenues of 4.5bn rupees (£50m).

On 11 April, the firm's JV in the Kingdom of Saudi Arabia (KSA) acquired Sames, the market leader in the commercial pest control sector in KSA. The business generated revenues of £9m in the last 12 months prior to acquisition.

Story provided by StockMarketWire.com

Related Company: RTO

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