8th Nov 2013 07:53
LONDON (Alliance News) - Rentokil Initial PLC Friday reported a jump in revenue and profits for the third quarter, buoyed by its acquisition of Western Exterminator in the US last year, but organic revenues also rose as its recent restructuring programme started to pay off.
The pest control to facilities management company bought Western in September last year for USD98.6 million. Western operates mainly in California, but also has offices in Arizona and Nevada.
In a trading update, Rentokil said its revenues rose 6.2% in the third quarter to GBP585.1 million, lifted by Western and as exchange rates proved favourable. At constant exchange rates, revenues were up 3.8%, while they rose 1% excluding acquisitions and disposals.
Its pretax profit rose 6.1% to GBP43.6 million, or 3.1% at constant exchange rates.
While the company has been boosted by exchange rate moves so far this year, it expects the recent strengthening of sterling to mean the boost to full-year profits will be GBP3 million less than it previously expected, at GBP3 million.
The company has been going through another restructuring programme over the past year, cutting costs after it was hit hard by the economic downturn. It is now coming to the end of the revamp, and expects savings of GBP10 million a year from 2014. It expects to book restructuring costs of GBP60 million this year.
"As we approach the end of a major restructuring and investment programme, my focus is now on converting this into improved profitability and cash generation. Our overheads are coming down, our businesses are becoming more efficient and during next year our restructuring costs and capex will also reduce," new Chief Executive Andy Ransom said in a statement.
Ransom said he will lay out his plans for the company when it reports its full-year results.
Rentokil said trading remains difficult in Europe, particularly in the Netherlands, but North American profits are well ahead thanks to the Western acquisition, and Asia is also performing strongly. Profits in its main UK & Ireland business were up 15.7% in the third quarter.
By Steve McGrath; [email protected]; @SteveMcGrath1
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