31st Jul 2019 08:51
(Alliance News) - Pest control firm Rentokil Initial PLC on Wednesday reported its best interim organic growth performance in over five years.
Rentokil posted 4.2% organic revenue growth in the first half of 2019, the best in over half a decade, despite wet weather in North America during the second quarter.
Overall revenue growth was 10% at actual currency, and 8.5% constant currency, reaching GBP1.30 billion.
Rentokil has posted a pretax profit of GBP113.8 million, 3.7% higher at actual rates on the year before. The adjusted figure rose 14% actual rates to GBP141.6 million.
FTSE 100-listed Rentokil has increased its interim dividend to shareholders by 15% on the year before to 1.51 pence per share.
Chief Executive Andy Ransom said: "The business has performed very well in the first six months with strong organic growth of 4.2%, driven by the expertise of our people, our continued leadership in technology and innovation, and further execution of high-quality acquisitions in growth and emerging markets.
"We have made 17 acquisitions in Pest Control and Hygiene, including a top-40 pest control business in the US and new market entries into Jordan and Sri Lanka. We are also delighted with the sale of our stake in the JV with Haniel, the proceeds from which we will use initially to reduce debt and then redeploy into further M&A to build scale and density. Our pipeline of M&A prospects remains strong and we now expect to spend over GBP250 million on acquisitions during the year," he continued.
"I am very encouraged by our performance in the first half and confident of delivering further progress in the second half. Our guidance for the full year remains unchanged."
In North America, revenue grew 9.6%, with 3.7% organic growth, but this was held back slightly by "unusually" wet weather in some parts of the US during the second quarter. Operating profit growth was 15%, driven by revenue growth and acquisitions.
Rentokil's Europe revenue rose 7.7%, and 4.8% organically, helped by an "excellent" half in Germany and strong growth in southern Europe. In the UK & Rest of the World, revenue grew 10%, and 4.5% organically, in an "excellent" half.
Asia revenue was up 12%, 5.5% organically, in a good period, with both Pest Control and Hygiene doing well. Pacific revenue climbed 2.4%, and 1.9% organically, with core businesses having a good period and Australia "notably" stronger.
Shares were 3.4% higher on Wednesday morning in London at 426.00p each, making Rentokil the second-best FTSE 100 performer.
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