Rentokil Initial announced six-month results last week, which showed pretax profit of 161.9 million pounds ($196.8 million) for the six months, compared with GBP148.8 million for the same period a year earlier. This includes 11 percent growth at the company’s pest control business.
During a July 28 webcast, Rentoil Initial CEO Andy Ransom commented, “The business has evidenced excellent momentum in the first half of the year with strong growth in Ongoing Revenue excluding disinfection of 12.0% and Organic growth of 7.3%, driven by momentum across our Pest Control and Hygiene & Wellbeing businesses. We’re delivering on our priorities: continued outstanding customer service and investment in innovation and digital, sustained high levels of customer and colleague retention, excellent progress on integration planning for the Terminix transaction, as well as strong delivery on our pipeline of other quality M&A opportunities.”
Ransom also said the $6.7 billion deal to acquire Terminix continues to progress well on approvals front, including the satisfaction of US anti-trust conditions and the divestiture of Terminix’s UK and Norway pest management businesses. The deal remains on track for completion at or around the end of the third quarter of 2022.
Ransom added that the group continues to expand through M&A, initiating 31 acquisitions in 17 countries during through to the end of June. He said, “The nature of our business model remains a key determinant of the strength and resilience of our performance. As a global operation that benefits from highly defensive product and service lines, the company is well placed to navigate macro-economic and geopolitical volatility. In the first half, the topline has sustained strong momentum. We’ve been successful in proactively managing cost inflation through pricing to protect margin, while continuing to drive margin improvements through delivery on our strategy. In addition to delivering increased scale and density in North America and leadership in the global pest control market, the Terminix acquisition provides a significant opportunity to achieve additional structural cost savings across the combined organisation. We look forward to delivering further good progress in the second half of the year.”
The M&A spree means that net debt is now equal to 2.2 times cash profits, against a multiple of 1.96 at the end of 2021.