25th Jul 2024 10:05
(Alliance News) - Rentokil Initial PLC shares fell on Thursday, with a higher dividend failing to get shareholders excited.
Shares in Rentokil were down 5.6% to 447.00 pence each in London on Thursday morning. The wider FTSE 100 index was down 0.8%.
In the first half of 2024, the Crawley, England-based pest control and hygiene firm reported that revenue edged up 1.3% to GBP2.71 billion from GBP2.67 billion a year earlier.
Pretax profit edged up 5.6% to GBP253 million from GBP240 million.
Rentokil upped its interview dividend to 3.16 pence from 2.75p.
Looking ahead, Rentokil said it is "encouraged" by the positive momentum in its US pest control business in the first half and expects further improvement through the second half.
It expects to grow organic revenue in North America within the range of 2% to 4% for the full year, but at the lower end of the range.
It also said it expects a GBP12 million revision to adjusted operating profit in the full year, which reflects the additional growth investment in the second half.
Chief Executive Andy Ransom said: "The North America integration has made strong progress, with the first branch integrations and synergies delivered firmly on track. We are focused on re-accelerating organic growth in the region. Four months into our new Right Way 2 plan, we are now beginning to see encouraging early signs of operational and financial improvement.
"Building on this foundation, we are making an additional USD25 million investment as we prioritise organic growth opportunities, alongside delivery of the integration."
Thursday's earnings report comes ahead of reports of a possible takeover of Rentokil.
On Sunday, the Times reported that the former CEO of BT Group PLC is leading a possible takeover offer for the pest control firm.
Philip Jansen is in talks with private equity firms over a plan that would see him become executive chair of the FTSE 100 company, the newspaper said without citing sources. The Times noted that Jansen is close to Bain Capital.
The Times said "it is understood" that, if successful, Jansen and his backers would use Rentokil as a consolidation vehicle to buy other pest control companies in the US, before looking to re-list it in New York.
By Sophie Rose, Alliance News senior reporter
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