Rentokil Q3 revenue rises, full-year guidance unchanged

Rentokil reported a 13.7% rise in third-quarter ongoing revenue on Thursday as the company’s pest control division performed well.

Ongoing revenue increased to £579.5m, with 3.7% organic revenue growth and 10% growth from acquisitions. Organic growth for the quarter excludes revenue from product sales by the group to the Haniel JV. Organic growth including these revenues was 4.6% in the quarter.

The pest control business grew by 17.8%, with growth markets delivering a 12.3% increase and emerging markets delivering revenue growth of 65.7%, reflecting the impact of Rentokil’s joint venture in India.

Meanwhile, the hygiene operations continued to grow steadily, with revenues up 13.2%, of which 2.6% was organic revenue growth. Ongoing revenue in the group’s Protect & Enhance markets fell 0.2%, mostly due to ongoing market weakness in its UK property care business.

Rentokil noted continuing strong performances in Asia Pacific, Latin America and its largest market, North America in the quarter, while Europe delivered a further improvement in ongoing revenue growth, with revenues in France up 2.4% on the year.

The company said several of its operations within the North American, Latin American and Rest of the World businesses were temporarily hit by severe weather conditions in September, but trading is now back to normal in most of these markets apart from Puerto Rico.

Chief executive Andy Ransom said: "It has been a good period for M&A with six businesses acquired in growth and emerging markets, principally in pest control. We are also very pleased to have completed our divestment of eight flat linen laundries in France to RLD.

“Notwithstanding the impact of severe weather conditions on some of our businesses in the third quarter, prospects remain good for the remainder of the year across the majority of our markets, and our guidance for the full year is unchanged."