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Rentokil Initial reports boost in organic revenue growth during Q1
StockMarketWire.com
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Group ongoing revenue at Rentokil Initial was up 15.4% for the first three months of the year, the majority of which was organic.
According to the company's trading update for the first quarter of 2021, hygiene delivered a 48.5% increase in ongoing revenue, supported by a revenue contribution of £75.5 million from one-time disinfection services, reducing, as anticipated, by approximately 25% on the high watermark level of £100 million in Q4 2020.
Pest control delivered ongoing revenue growth of 10.5% and saw a return to organic growth of 1.2% in the first quarter of 2021.
Recovery in Rentokil's core businesses, particularly pest control, has demonstrated growing momentum over the quarter, and the company exited March 2021 with group organic growth of 2.5% (excluding disinfection) and organic growth in pest control of 6.3%.
North America delivered a very strong performance in the first quarter, with ongoing revenue of £332.6 million, an increase of 39.4%, with £263.4m of revenue generated from pest control and a £53.6 million contribution from disinfection services.
Trading conditions in the UK & Rest of World operations, which have been severely impacted by lockdowns throughout the quarter, are expected to improve significantly over the coming weeks, reflecting progress in the UK's vaccination programme and subsequent easing of lockdown restrictions.
Performance in Europe was in line with expectations for the period, with Germany, Southern Europe and Latin America (managed out of Europe) in positive growth territory throughout the quarter and with France and Benelux returning to growth in March.
The recent reintroduction of lockdowns in parts of Europe, such as France, are likely to result in the recovery of European markets being several weeks behind the recovery now anticipated in the UK and elsewhere.
During the first three months of the year, Rentokil signed seven acquisitions - six in pest control and one in protect and enhance (Ambius) - in Australia, Canada, France, Germany, Italy, Spain and Sweden, with combined annualised revenues in the year prior to acquisition of around £13 million.
The company has built a 'substantial pipeline of high-quality opportunities' and remains confident in its targeted spend of circa £400 million in 2021.
Story provided by StockMarketWire.com
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