Rentokil Initial PLC Q1 Trading Update (6538C)
April 19 2017 - 1:00AM
UK Regulatory
TIDMRTO
RNS Number : 6538C
Rentokil Initial PLC
19 April 2017
RENTOKIL INITIAL PLC (RTO)
FIRST QUARTER TRADING UPDATE
19 April 2017
(GBPm) Q1 2017 Growth
AER AER CER
Ongoing Revenue(1) 579.0 23.8% 10.0%
Revenue 580.0 22.9% 9.2%
Overview (CER)
Ongoing Revenue increased by 10.0% in Q1, of which 3.1% was
Organic Revenue(2) growth (Q1 2016: 2.8%, FY 2016: 3.0%) and 6.9%
was from acquisitions. On 16 December 2016 the Company announced
the proposed transfer of its workwear and hygiene businesses in
Germany and the Benelux to a joint venture (JV) with Haniel. The
transaction remains on track to complete by mid-year, subject to
competition clearance. Excluding those businesses transferring to
the JV the Organic Revenue growth rate was 3.5%. Pest Control grew
by 19.1% (5.6% Organic Revenue growth) while Hygiene revenues rose
by 3.7% (3.1% Organic Revenue growth). Ongoing Revenue growth in
our Emerging and Growth markets has once again been strong,
increasing by 24.5% and 12.6% respectively. Our businesses in
Manage for Value markets delivered Ongoing Revenue growth of 2.5%
while those in the Protect and Enhance markets delivered in line
with last year.
There has been continuing strong performance in Asia, Pacific,
Latin America, the UK and in our largest market, North America.
Europe delivered improved Ongoing Revenue growth in Q1, with
revenues in France broadly flat year on year.
M&A
We have acquired 12 businesses this year to date, ten in Pest
Control, one in Hygiene and one in Property Care, principally in
Emerging and Growth markets. Combined annualised revenues of the
businesses acquired totalled GBP101.7m in the 12 months immediately
prior to acquisition.
In February we announced the acquisition of Atlanta-based pest
control company Allgood Pest Solutions. The business generated
annualised revenues for the 12 months prior to acquisition of
$26.6m.
Also, as previously announced, in March we completed the
transaction to create a joint venture with PCI Pest Control Pvt.
Ltd. (PCI), India's largest pest control company, which offers a
comprehensive range of pest control services and products through
its countrywide network. Rentokil, which has management control of
the JV, is integrating its Indian operations into the JV and the
combined business has revenues of 4.5bn rupees (c. GBP50m), will
operate from c. 250 locations and employ c. 6,900 people.
On 11 April our JV in the Kingdom of Saudi Arabia (KSA) acquired
Sames, the market leader in the commercial pest control sector in
KSA with c. 2,500 customers covering most major cities, making us
the number one pest control company in KSA and the Gulf Cooperation
Council countries. The business generated revenues of GBP9m in the
last 12 months prior to acquisition.
Commenting on today's announcement Andy Ransom, Chief Executive,
said:
"We have made a good start to 2017. Pest Control has performed
well across the regions and we remain encouraged by the progress we
are continuing to deliver in Hygiene. We have been very active in
M&A in the first three months of the year, reinforcing our
strategy of acquiring high quality pest control and hygiene
businesses in Emerging and Growth markets. We are particularly
pleased with our JV with PCI in India, which is an outstanding
business in a country with significant growth potential for
commercial and residential pest control services.
"We are confident that the Company will deliver a performance in
line with expectations for 2017."
Enquiries:
Rentokil
Investors Katharine Initial
/ Analysts: Rycroft plc 07811 270734
Rentokil
Malcolm Initial
Media: Padley plc 07788 978 199
John Sunnucks Bell Pottinger 0203 772 2549
AER - actual exchange rates; CER - constant 2016 exchange
rates
(1) Ongoing Revenue represents the performance of the continuing
operations of the Group (including acquisitions) after removing the
effect of disposed or closed businesses.
(2) Organic Revenue represents the growth in Ongoing Revenue
excluding the effect of businesses acquired during the year.
Acquired businesses are included in organic measures in the year
following acquisition, and the comparative period is adjusted to
include an estimated full year performance for growth
calculations.
This announcement contains statements that are, or may be,
forward-looking regarding the group's financial position and
results, business strategy, plans and objectives. Such statements
involve risk and uncertainty because they relate to future events
and circumstances and there are accordingly a number of factors
which might cause actual results and performance to differ
materially from those expressed or implied by such statements.
Forward-looking statements speak only as of the date they are made
and no representation or warranty, whether expressed or implied, is
given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. Other than in
accordance with the Company's legal or regulatory obligations
(including under the Listing Rules and the Disclosure and
Transparency Rules), the Company does not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events or otherwise.
Information contained in this announcement relating to the Company
or its share price, or the yield on its shares, should not be
relied upon as an indicator of future performance. Nothing in this
announcement should be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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