Rentokil shares up on a “strong” Q3 performance

Rentokill Initial

Rentokil shares (LON: RTO) opened higher on Thursday morning as the group posted a 10% rise in revenue.

The group saw a growth in demand for hygiene services, which offset the lower demand for pest control sales.

Rentokil revealed a 17.4% year-on-year increase in revenue to £343.4m for the period in the North America division.

Andy Ransom, Chief Executive of Rentokil, commented on the results: “The Company performed very strongly in the third quarter and today’s results further demonstrate the resilience of our Pest Control and Hygiene businesses across the world. We have consistently delivered year-on-year revenue growth each month since the declines in April and May during the peak of the crisis.

“This performance has been achieved through a combination of a return to more regular levels of service provision across our categories, continued high demand for one-time disinfection services and the benefit of acquisitions made in 2019.

“It remains impossible to predict the future development of the COVID-19 pandemic. It could have a direct impact on our trading performance, including resurgence of global cases of COVID-19, new and continued Coronavirus restrictions, potential customer insolvencies and bad debt, as well as indirectly depending how demand for our services is impacted by the economic consequences of the pandemic.

“In addition, we anticipate demand for disinfection services will reduce as businesses return to more normal trading conditions and as service frequencies potentially decrease.”

The group has said it expects full-year expectations to be in line with expectations, despite disruption and uncertainty around the pandemic.

The FTSE-100 firm will be providing full-year dividends in February.

Rentokil shares (LON: RTO) are trading 2.40% higher at 529,40 (0814GMT).