Portfolio

Rentokil Q3 revenue rises as CMA raises worries over Cannon purchase

By Frank Prenesti

Date: Thursday 18 Oct 2018

Rentokil Q3 revenue rises as CMA raises worries over Cannon purchase

(Sharecast News) - Third quarter ongoing revenue at pest control group Rentokil increased by 11.8% to £637.4m at constant exchange rates, as the UK competition regulator flagged concerns about its purchase of Cannon Hygiene.


The Competition and Markets Authority said it had found provisionally that Rentokil's takeover of Cannon could lead to higher prices or lower quality for some customers. The company had not responded at time of publication.

On the trading update, Rentokil said 4.1% of the revenue rise was organic revenue growth and 7.7% from acquisitions. Adjusting for the impact of Hurricane Irma on Rentokil's operations in Puerto Rico in September 2017, group organic growth was 4.4%.

​Chief executive Andy Ransom said the company continued to work on its mergers and acquisitions programme and remained on track to meet expectations for the full year.

"Our M&A pipeline going into Q4 and 2019 remains strong," the company said.

Rentokil bought 16 businesses during the quarter with annualised revenues of £39.0m. For the year to 30 September 2018 it acquired a total of 39 firms primarily in emerging and growth markets.

Annualised revenues of the businesses acquired so far in 2018 totalled £156.3m in the year prior to purchase.

"Pest Control grew by 11.4% (5.3% organic and 5.7% adjusting for Puerto Rico), with good performances being delivered across both growth and emerging markets."

"The business enjoyed favourable weather conditions across Europe and the UK which has supported stronger jobbing revenues. North America grew ongoing revenue by 12.1% (4.6% organic and 5.3% adjusting for Puerto Rico)."

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