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Rentokil Initial PLC

 Rentokil Initial PLC A good start to 2019

 Rentokil Initial PLC (LON:RTO), today announced q1 trading update.

(£m)

Q1 2019

Growth

AER

AER

CER

Ongoing Revenue1

603.6

10.6%

8.9%

Revenue

607.4

10.3%

8.6%

 

Overview

Trading has started well across our businesses in Q1 with Ongoing Revenue1 increasing by 8.9%, of which 4.0% was Organic Revenue2 growth (Q1 2018: 3.2%, FY 2018: 3.7%) and 4.9% was from acquisitions.

Ongoing Revenue in Pest Control grew by 12.0%, 5.0% Organic (Q1 2018: 4.7%), with good performances being delivered across both Growth and Emerging markets, which rose by 12.1% and 11.5% respectively. Hygiene has made a very positive start to the year, with Ongoing Revenue growth of 7.2% and Organic Revenue growth of 4.3% (Q1 2018: 1.8%). Ongoing Revenue in our Protect & Enhance markets was in line with Q1 2018.

M&A

​We signed eight acquisitions in Q1, four in Pest Control (primarily in North America and Latin America) and four in Hygiene, with combined annualised revenues of c. £29m in the year prior to purchase. We are encouraged about our prospects for further M&A this year and our pipeline of value-enhancing opportunities is strong. Our guidance for M&A spend in 2019 remains in the range of £200m to £250m.

Pension Scheme and Funding

In December 2018 the Company reached agreement for a bulk annuity insurance ‘buy-in’ for its UK Defined Benefit Pension scheme (“the Scheme”) in contemplation of a full ‘buy-out’ which is expected to complete in early 2020. Good progress towards buy-out is being made and we now anticipate a pre-tax cash surplus of c. £40m will be returned to the Company on completion.

Ahead of the refinancing of our €500m bond maturing in September this year, we are intending to hold a non-deal, bond investor education roadshow in London, France, Germany, the Netherlands, Nordics and Asia. We will release further details in due course.

​Commenting on today’s announcement Andy Ransom, Chief Executive, said:

“We have had a good start to 2019 and I’m pleased with our performance in the first three months of this year. I am confident of another year of successful growth for the Company, in line with market expectations.”