Rentokil Initial Announces Six-Month Results

Rentokil Initial Announces Six-Month Results

In a July 30 webcast, CEO Andy Ransom said the company is moving from crisis to recovery phase.

Subscribe
July 31, 2020


GATWICK, UK - Rentokil Initial reported a 9.4% fall in ongoing operating profit to $181.4 million (£138.8m) for the first six months of 2020. Revenue grew by 1.0% to $1,677.6 million (£1,283.3m). 

Revenue from pest control declined by 5.9%, whereas in the Hygiene sector, revenue rose by 16.3%, reflecting inclusion of revenues of $64 million (£49m) from disinfection services. 

Overall, the impact of the virus reduced over the second quarter with revenues down 12.1% in April, 5.7% in May but up 4.2% in June. 

Summing up the performance, Andy Ransom, CEO of Rentokil Initial plc said that the company had now moved from the crisis phase into the recovery phase and was now entering the strategic phase. This will include expansion of the hygiene business and the restarting of merger and acquisition activities, with a pot of at least $100 million available.

In a locked down webcast broadcast to financial analysts on July 30 from Rentokil HQ in Gatwick, Andy Ransom, said: “We have delivered an excellent performance in the first half, keeping our essential services on the road for our customers who remained open during the pandemic. We also moved at pace to develop new revenues to offset service shortfalls, particularly in our Hygiene business, and have taken decisive action on costs, with many of our people making personal sacrifices, enabling us to contain the profit reduction on lower revenue in Q2.”

Ransom paid tribute to his 43,000 colleagues around the world, who have demonstrated a remarkable ability to adapt to an unprecedented change in their daily working environment, while remaining focused on delivering excellent customer service. On behalf of the board, he publicly thanked all his colleagues for their commitment over the last few months, which had been nothing short of outstanding. He summed up by saying: “Our company has been significantly tested.”

North America, which accounted for 42% ($708 million) of group revenue and 38% ($92 million) of group profit, was highlighted as the least affected region, delivering a very robust performance to date with a 7.8% growth in revenue. He predicted the North American business would get close to its $1.5 billion revenue target for 2020. 

 
Revenue from pest control services increased by 11% driven by strong residential performance (which accounts for 40%) but commercial pest services were impacted to an extent by business closures. $27m revenue came from new disinfection services launched in the second quarter. Plans are to build on hand and air hygiene products, capitalizing on the large existing customer base, initially to be delivered via the Ambius business sector.
 
This matches ambitious plans to launch Hygiene in approximately 20 new countries by the end of 2020, making this range of services available in a total of 66 countries.
 
Concluding Mr Ransom said: “While it is impossible to predict the future development of the COVID-19 pandemic, or its economic impact, ours is a high quality and resilient business and we are entering the second half of 2020 with positive momentum.”