Rentokil sees revenue leap as North American market swells
The company's Terminix acquisition is proving fruitful across the pond
Pest control experts Rentokil saw revenue leap by 45 per cent in 2023 as the acquisition of US peer Terminix started to bear fruit.
The group today said that revenue grew from £3.7bn in 2022 to £5.3bn in 2023, while adjusted operating profit swelled to £898m from £571m the year prior.
Free cash flow was up 33.7 per cent to £500m while operating profit leapt from £317m to £625m, a boost of 97 per cent.
Off the back of these numbers management hiked the company’s dividend per share for the full-year by15 per cent to 8.68p while earnings per share ticked up 30.8 per cent to 15.14p.
The integration of US-based pest controller Terminix, acquired by Rentokil for $8bn (£6.7bn) in 2021, has seen it become a “powerhouse business” according to the firm’s chief and is instrumental in the bottom line growth seen in the 2023 results.
Such is the expectation of high performance from the North American unit, revenue for which grew 79 per cent, that the firm is raising expectations for pre-tax synergies by an additional $50m (£39m) to $325m (£255) gross.
Looking ahead, the firm said its pipeline of bolt-on prospects remains strong and expects to invest £250m in 2024.
Andy Ransom, chief executive of Rentokil, said: “We have continued to benefit from our diversified, global footprint and resilient business model, in addition to our sustained focus on customer service and investment in people, technology and innovation.
“We’re taking action to reinvigorate organic growth in the North American business. In our RIGHT WAY 2 plan, we have created a clear and comprehensive roadmap to reinvigorate growth in North America with the right team in place to execute on that.
“We have made strong progress in the integration of Terminix to create a powerhouse business in the world’s largest pest control market and the combination with Terminix continues to create significant value.”
