Rentokil posted a jump in full-year profit on Thursday and hiked its dividend, underpinned by recent acquisitions.
In its 2022 preliminary results, the company said adjusted pre-tax profit rose 27.7% to £532m, with statutory revenue 25.6% higher at £3.7bn. Rentokil pointed to the benefit of M&A, including the acquisition of US extermination company Terminix, and strong organic revenue growth of 6.6%, “driven by resilient demand and effective price progression”.
On a statutory basis, pre-tax profit declined 9.1% to £296m. This was due to one-off and adjusting items, and interest related to the Terminix transaction.
The company said it had made “excellent” progress on the Terminix integration and lifted its total synergy target from at least $150m to at least $200m in FY25, with $60m of incremental pre-tax net cost synergies expected to be delivered in FY 23.
The dividend per share was increased 18.2% to 7.55p.
As a result of its ongoing operational and strategic plans, and benefits from the Terminix acquisition, Rentokil upped its medium-term guidance for organic revenue growth between 4% and 5% to “at least 5%”.
Chief executive Andy Ransom said: “Our strong financial results, with Organic Revenue growth of 6.6%, demonstrate the resilience of our business model. We continue to successfully manage cost inflation, while driving investment in our services and people to sustain high levels of customer and colleague retention.
“All of this has been achieved alongside the landmark acquisition of Terminix, reinforcing Rentokil Initial as the largest pest control company in the world. Early progress on integration has been excellent.”
