22nd Oct 2020 09:20
(Alliance News) - Rentokil Initial PLC on Thursday said it performed "very strongly" in the third quarter, due to a combination of a return to more regular levels of service provision, high demand for one-time disinfection services, and benefits from past acquisitions.
The pest control and hygiene company reiterated its plan to pay a dividend for 2020 and said annual results will be at least "in line with expectations".
Rentokil posted a 4.3% revenue hike for the third quarter of 2020, or 8.5% in constant currency. Revenue came in at GBP758.1 million during the period, with "all core categories delivering performance improvements".
The company's Pest Control division saw 1.3% growth in third-quarter revenue from continuing operations to GBP469.7 million as the business was designated as an essential service in the majority of its operating markets, enabling it to continue to operate during the peak of the Covid-19 pandemic.
Core Hygiene operations saw a 53% year-on-year surge in third-quarter revenue to GBP210.6 million.
"Q3's improved performance reflects the resumption of more regular washroom services for customers who have been able to reopen their premises as country lockdown conditions eased during the quarter. Regular service shortfalls continue to be more than offset by demand from Hygiene and Pest Control customers for one-off services including general and specialist disinfection services and precautionary disinfection risk assessment surveys," Rentokil explained.
The FTSE 100-listed company also reported a "return to M&A" action, sealing six acquisitions during the quarter, five in pest control.
Chief Executive Officer Andy Ransom said: "The company performed very strongly in the third quarter and today's results further demonstrate the resilience of our Pest Control and Hygiene businesses across the world.
"It remains impossible to predict the future development of the Covid-19 pandemic. In addition, we anticipate demand for disinfection services will reduce as businesses return to more normal trading conditions and as service frequencies potentially decrease".
Shares in Rentokil were up 2.3% at 529.00 pence each in London on Thursday morning.
By Tapan Panchal; [email protected]
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