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.”
