Rentokil Initial Announces a 55% Increase in Profits for the First Half of 2021

Rentokil Initial Announces a 55% Increase in Profits for the First Half of 2021

Results include North America residential pest control rising by 27.8%.

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August 5, 2021

 

CRAWLEY, U.K. — During an online virtual presentation held on July 29, Rentokil Initial Chief Executive Officer Andy Ransom presented the company’s first half year (H1) results. 

“We have made excellent progress in the first six months of the year. Our revenue growth of 18.3% demonstrates a clear recovery of our core businesses as economic conditions improve across many of our markets," Ransom said. “We have been very active in M&A in H1 and have acquired some outstanding businesses both in North America and across our other regions of Europe, Latin America, Asia and the Pacific. We are particularly pleased to announce our transaction with Boecker (headquartered in Beirut, Lebanon) which expands our businesses across the Middle East and in Africa, in line with our strategy of focusing on important growth cities of the future.” 

Revenue rose 18.3% to £1,512.5m ($2102.60m) and profits by 55.4% to £215.9m ($300.13m) reflecting growth in all categories and regions. Ransom stated that their anticipated spend on M&A for the full year to increase from £400m ($556m) to the region of £450m ($625m) to £500m ($695m). Already in H1 24 acquisitions were completed, of which 21 were in Pest Control.

North America remains the company’s most significant geographic sector accounting for nearly half of group revenue and profit.

Rentokil Initial group financial highlights by region – First half year results 2021
 Group revenue Group profit
North America 46% 41%
Europe 24% 24%
UK & Rest of the world 16% 22%
Asia 8% 5%
Pacific 6% 8%
Group total £1,512.5m ($2102.60m) +18.3% £215.9m ($300.13m) +55.4%

Exchange rate £1 = $1.39

The Rentokil Pest Control sector accounted for 64% of total group revenue. Here ongoing revenue rose by 18.7% and profit by 36.7% over the H1 period.

In North America, residential pest control rose by +27.8% reflecting the continuation of home working and the contribution from Fla.-based Environmental Pest Service acquired in December 2020. Commercial pest control revenue rose by +23.2% aided by good volumes of work across most markets, including recovery in the hotels and travel sectors. Revenues from one-time disinfection sales accounted for £64.3m ($89.39m).

Worldwide disinfection services were identified as a market opportunity in March 2020 and were launched in 60 markets. By taking the initiative here, Rentokil won new business and created roles for 7,000 staff. At its peak in H2 2020, it generated revenues of £173.6m ($241.33m). With demand for disinfection now declining, in H1 2021 it generated £98.3m ($136.65m) revenue, which is predicted to fall to £10m ($13.9m) to £20m ($27.80m) in the second half.

Advances in digital innovation emerging from the company’s UK development facility, the Power Centre, received specific praise. For example, across the globe, over 200,000 PestConnect pest monitoring and alert systems are now in the field in 28 countries – an increase of 32% over 2020. 

Soon to be launched is a new rodent control unit, Eradico. This is to be a single global solution, designed to withstand climatic extremes of -25°C to +50°C, made of 100% recyclable polymer and will replace a variety of over 20 different units currently used.