31st Jul 2025 11:27
(Alliance News) - Rentokil Initial PLC on Thursday kept its 2025 guidance unchanged, as it said business in the first half of 2025 was as expected despite challenges in its North American arm.
Rentokil shares were up 11% to 384.40 pence on Thursday morning in London, the biggest FTSE 100 index gainer.
The Crawley, West Sussex provides pest control and hygiene services. It said pretax profit was USD216 million in the first half of 2025, down 27% from USD294 million a year before.
Revenue rose by 3.0% to USD3.36 billion from USD3.27 billion, but operating expenses increased by 5.8% to GBP3.02 billion from GBP2.86 billion.
Rentokil declared an interim dividend of 4.15 US cents, unchanged from a year before.
It said current trading is in line with market expectations and left its outlook for the year unchanged.
"Our sales and marketing initiatives in North America are starting to have an impact, with organic revenue growth of 1.4% in the second quarter up from 0.7% in the first quarter. We are refocusing our marketing budget towards driving organic lead flow and we are seeing encouraging results, including from our satellite branches, where we now have 100 in operation," said Chief Executive Andy Ransom.
In North America, revenue was USD2.11 billion, up 2.0% in total on a year before, though adjusted operating profit fell 7.3% to USD356 million. Rentokil's business there is almost entirely from its Pest Control division at USD2.04 billion.
In the International business, which is split more equally between Pest Control and Hygiene & Wellbeing, revenue rose 5.1% to USD1.25 billion, while adjusted operating profit increased 4.6% to USD242 million. Pest Control revenue was USD747 million in the International division and Hygiene & Wellbeing revenue was USD504 million.
Back in May, Rentokil sold its Workwear business in France to HIG Capital LLC at an enterprise value of around EUR410 million. The disposal concentrated the company on its two main divisions.
Broker Peel Hunt said it is keeping its 2025 estimates unchanged following the results, as the North American business is showing early signs of improvement.
"We believe near-term integration and growth risks are compensated by the substantial de-rating and longer-term potential," said analyst Christopher Bamberry. "We therefore reiterate our Hold rating and 352p target price."
By Tom Waite, Alliance News editor
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