16th Mar 2023 09:49
(Alliance News) - Rentokil Initial PLC on Thursday said profit was down, but revenue surged by a quarter on the back of its acquisition of Terminix Global Holdings Inc.
The Crawley, West Sussex-based pest-control firm reported 2022 pretax profit of GBP296 million, falling 8.9% from GBP325 million in 2021, due to one-off and adjusting items and interest relating to its acquisition of Terminix.
Rentokil completed its acquisition of pest control business Terminix for USD6.7 billion in cash and shares in October last year.
Revenue amounted to GBP3.71 billion, up 25% from GBP2.96 billion the year prior. The company said the revenue increase reflected the benefit of its mergers and acquisitions, particularly that of Terminix, as well as strong organic revenue, which grew 5.7% in North America and 9.1% in Europe.
The company noted that operating expenses surged 29% to GBP3.37 billion, from GBP2.6 billion in 2021.
Rentokil declared a final dividend of 5.15 pence per share, up from 4.30p, bringing the total dividend to 7.55p per share, rising from 6.39p in 2021.
Looking ahead, the company said it has confidence in its operational and strategic plans, adding that it expects good underlying trading momentum in 2023.
Chief Executive Officer Andy Ransom said: "Our strong financial results, with organic revenue growth of 6.6%, demonstrate the resilience of our business model. We continue to successfully manage cost inflation, while driving investment in our services and people to sustain high levels of customer and colleague retention.
"All of this has been achieved alongside the landmark acquisition of Terminix, reinforcing Rentokil Initial as the largest pest control company in the world. Early progress on integration has been excellent."
Rentokil shares rose 6.4% to 535.20 pence each in London on Thursday morning, the best large-cap performer.
By Harvey Dorset, Alliance News reporter
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