Rentokil Initial, a leading provider of pest-control, hygiene, and workwear services, has announced a significant increase in revenue for the third quarter. Although the company experienced a weaker-than-expected performance in North America, it remains optimistic about its full-year guidance at the group level.
Strong Revenue Growth
In the third quarter, Rentokil Initial reported a revenue of £1.40 billion ($1.70 billion) at constant exchange rates, representing a 60% rise from the £878 million generated in the same period last year. Even at actual exchange rates, the company's revenue increased to £1.38 billion, a 53% rise from the previous year's figure of £901.3 million.
This substantial growth can be attributed to successful mergers and acquisitions, including the integration of Terminix. Rentokil Initial expressed satisfaction with the progress of the integration plan and confirmed their commitment to achieving the full-year pretax net cost synergy target of $60 million.
Organic Revenue Growth
In addition to the gains from mergers and acquisitions, Rentokil Initial also experienced organic revenue growth of 4.3%. This demonstrates the company's ability to expand its services and attract new customers through its core offerings.
While Rentokil Initial remains confident about its overall performance, it expects its regional performance in North America to be slightly lower than previously anticipated. This is due to near-term market uncertainty in the region. As a result, the company has adjusted its expected regional adjusted operating margin to be between 18.5% and 19.0%, down from 19.5%. However, at the group level, Rentokil Initial maintains its target operating margin of 16.5%.
Overall, Rentokil Initial's strong Q3 performance demonstrates its resilience and strategic growth initiatives. The company is focused on maintaining its market-leading position and delivering value to its shareholders.