Rentokil Initial PLC Q1 Trading Update (3888L)
April 19 2018 - 2:00AM
UK Regulatory
TIDMRTO
RNS Number : 3888L
Rentokil Initial PLC
19 April 2018
RENTOKIL INITIAL PLC (RTO)
FIRST QUARTER TRADING UPDATE
19 April 2018
(GBPm) Q1 2018 Growth
AER AER CER
Ongoing Revenue(1) 545.9 10.8% 15.7%
Revenue 550.7 -5.1% -1.5%
Overview
Trading has started well across our businesses in Q1 with
Ongoing Revenue increasing by 15.7%.
Organic Revenue(2) Growth of 3.2% compares to Q1 2017 at 3.7%*
(3.1% Reported) and Q4 2017 (3.1%). Organic growth has been
affected by the ongoing impact of last September's hurricane on our
operations in Puerto Rico (as previously highlighted at the time of
our Preliminary results) and unseasonably cold weather in the US in
March which has delayed the onset of the spring pest season.
Excluding the impact of Puerto Rico, 2018 Q1 Organic growth is in
line with Q1 2017.
Acquisitions have performed well contributing 12.5% to Ongoing
Revenue in the first quarter.
Ongoing Revenue in Pest Control grew by 15.8% (4.7% Organic, Q1
2017: 5.6%, Q4 2017: 4.9%) with Growth markets growing by 12.4% and
Emerging markets increasing by 38.2%, reflecting the strong
performance of our joint venture in India.
Q1 2018 Hygiene Ongoing Revenue rose by 29.3% (1.8% Organic, Q1
2017: 3.4%, Q4 2017: -0.2%), driven by the acquisitions of Cannon
Hygiene and CWS Italy.
Ongoing Revenue in our Protect & Enhance markets declined by
-0.1% (-0.3 Organic, Q1 2017: -0.9%, Q4 2017: 1.0%) due to ongoing
market weakness in our UK Property Care business, offset by a
stronger performance from our French business.
While currency markets remain volatile, our guidance for the
adverse impact of foreign exchange on profit is in the range of
GBP10m to GBP15m for the year, as previously guided at the
Preliminary results on 1 March 2018.
M&A
In the three months to 31 March 2018 we made 11 pest control
acquisitions (five in North America with annualised revenues of
$27m) in addition to the Cannon Hygiene businesses acquired in
January. Combined annualised revenues of the 12 businesses acquired
was GBP103.0m in the year prior to purchase. Our guidance for
M&A spend remains in the range of GBP200m to GBP250m which will
be funded by cash held on the balance sheet at the beginning of the
year. We are encouraged about our prospects for further M&A
this year and our pipeline of value-enhancing opportunities is
strong.
Commenting on today's announcement Andy Ransom, Chief Executive,
said:
"I am pleased with our performance in Q1 and we are
well-positioned for another year of successful growth. We are
confident that the Company will deliver a performance in line with
market expectations for 2018."
Enquiries:
Rentokil
Investors Katharine Initial
/ Analysts: Rycroft plc 07811 270734
Rentokil
Malcolm Initial
Media: Padley plc 07788 978 199
(1) Ongoing Revenue represents the performance of the continuing
operations of the Group (including acquisitions) after removing the
effect of disposed or closed businesses.
(2) Organic Revenue represents the growth in Ongoing Revenue
excluding the effect of businesses acquired during the year.
Acquired businesses are included in organic measures in the year
following acquisition, and the comparative period is adjusted to
include an estimated full year performance for growth
calculations.
*In Q1 2017 the Company reported Organic growth of 3.1% in Q1
but noted that excluding the businesses transferred to the Haniel
JV, the Organic growth figure would have been 3.5%. We have further
adjusted this number to exclude the eight French flat linen
laundries sold to RLD in H2 2017, which results in a revised
comparative number for Q1 2017 of 3.7%.
AER - actual exchange rates; CER - constant 2017 exchange
rates
This announcement contains statements that are, or may be,
forward-looking regarding the Group's financial position and
results, business strategy, plans and objectives. Such statements
involve risk and uncertainty because they relate to future events
and circumstances and there are accordingly a number of factors
which might cause actual results and performance to differ
materially from those expressed or implied by such statements.
Forward-looking statements speak only as of the date they are made
and no representation or warranty, whether expressed or implied, is
given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. Other than in
accordance with the Company's legal or regulatory obligations
(including under the Listing Rules and the Disclosure Guidance and
Transparency Rules), the Company does not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events or otherwise.
Information contained in this announcement relating to the Company
or its share price, or the yield on its shares, should not be
relied upon as an indicator of future performance. Nothing in this
announcement should be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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