16th Apr 2020 09:06
(Alliance News) - Pest control and hygiene firm Rentokil Initial PLC on Thursday said first-quarter revenue climbed despite a "marked" impact from the Covid-19 pandemic in the final two weeks of March.
Revenue in the first three months of 2020 was 4.4% higher year-on-year at GBP634.1 million. At constant currency, it climbed 5.8%.
Ongoing Revenue, meaning excluding acquisition and disposals, was 5.8% higher annually at GBP630.5 million, rising 7.2% at constant currency.
It was "good start to the year" by Rentokil's reckoning, with net operating margins also increasing in line with expectations.
"While the net impact from the coronavirus outbreak was not significant for the first 10 weeks of the year, we saw a marked impact in the last two weeks of March, as the crisis deepened across the world," Rentokil noted.
Work at its Pest Control and Hygiene units has been deemed as essential services during government-imposed lockdowns.
The Pest Control sector has hotels and restaurants among its largest customers, and these have been forced to close during lockdowns.
And on Hygiene, Rentokil said: "Once again, the sectors that have been most affected are [hotels, restaurants and catering] and offices. Mitigating this impact to some degree, however, has been strong global demand by both Hygiene and Pest Control customers for hygiene products such as hand sanitisers and other hygiene services including general and specialist biohazard disinfection and deep clean services and precautionary disinfection risk assessment surveys.
"The impact of the virus has varied significantly across our country operations depending on the prevalence of cases of the Covid-19 virus and the extent to which the relevant country has been placed in lockdown."
In Italy, which was in severe lockdown before curbs eased earlier this week, Rentokil's quarterly revenue fell 5.7% annually, and by 15% in March alone.
India had a 20% decline in March and a more modest 5.4% fall over the whole quarter.
In North America, which Rentokil said is "estimated to be around two weeks behind Europe in the crisis", had a 10% first quarter revenue hike, helped by 8.5% growth in MArch.
"Other markets, for example Australia and Indonesia, have to date been less directly affected by the crisis with growth rates of 3.4% and 44.8% in the quarter respectively," Rentokil added.
The FTSE 100 company warned that the financial damage from the virus will be greater in the second quarter than it was in the final two weeks of March, due to more countries being mired in lockdowns.
In March, Rentokil said it withdrew its final payout, froze all hiring and scaled back marketing spend.
It added on Thursday that its chief executive will take a 35% salary cut in the second quarter of the year. Rentokil also has furloughed staff, laid some off, and reduced salaries and hours.
Shares in the company were 3.5% higher at 406.30 pence each in London on Thursday morning.
By Eric Cunha; [email protected]
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