Rentokil Initial PLC 6-K, filed Mar 5, 2026
Rentokil Initial PLC (RTO)
6-K
2026-03-05
For: 2026-03-05
View Original
Added on
July 07, 2026
About this 6-K
Rentokil Initial PLC filed this 6-K on March 5, 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 6-K
__________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of March 2026
Commission File Number: 001-41524
___________________________________
Rentokil Initial plc
(Registrant’s name)
___________________________________
Compass House
Manor Royal
Crawley
West Sussex RH10 9PY
United Kingdom
(Address of principal executive office)
_____________________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1): ☐
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7): ☐
|
Preliminary
Results dated 05 March 2026
|
|
2025 Preliminary Results
|
●
|
Evolved strategy improves performance
with H2 Organic Revenue1 Growth
of 3.5% (H1: 1.6%).
|
|
●
|
Improvement in North America Pest Control Services Organic Revenue
Growth to 2.6% in Q4.
|
|
●
|
Free Cash Flow
Conversion1 of
98% ahead of guidance.
|
|
●
|
On track to deliver North America 2027 targets of $100m cost
reduction and above 20% margin.
|
|
●
|
Simplified approach to deliver c.800 branches and c.30 retained
brands in North America.
|
|
Financial Results Continuing Operations
|
Adjusted Results1
|
|
Statutory Results
|
||||||
|
$m
|
2025
$m
|
2024
$m
|
Change
(reported
)%
|
Change
(constant currency)
%
|
2025
$m
|
2024
$m
|
Change
(reported)
%
|
Change
(constant currency)
%
|
|
|
Revenue
|
6,908
|
6,617
|
4.4%
|
3.8%
|
|
6,908
|
6,617
|
4.4%
|
3.8%
|
|
EBITDA
|
1,430
|
1,365
|
4.8%
|
|
|
|
|
|
|
|
Operating Profit
|
1,070
|
1,008
|
6.2%
|
5.4%
|
|
584
|
644
|
(9.3%)
|
(10.2%)
|
|
Operating Profit margin
|
15.5%
|
15.2%
|
0.3%pts
|
0.3%pts
|
|
8.5%
|
9.7%
|
(1.2%pts)
|
(1.3%pts)
|
|
Profit before Tax
|
876
|
842
|
4.0%
|
4.1%
|
|
390
|
462
|
(15.6%)
|
(15.3%)
|
|
Free Cash Flow
|
615
|
494
|
24.5%
|
|
|
|
|
|
|
|
Basic EPS
|
25.91c
|
25.31c
|
2.4%
|
|
|
11.49c
|
13.72c
|
(16.3%)
|
|
|
Dividend Per Share
|
12.39c
|
12.03c
|
3.0%
|
|
|
|
|
|
|
|
Net debt
|
3,650
|
4,017
|
|
|
|
|
|
|
|
|
Net debt:EBITDA
|
2.6x
|
2.9x
|
|
|
|
|
|
|
|
Andy Ransom, Chief Executive of Rentokil Initial plc ("the
Company"), said:
"2025 has been a year of encouraging progress with improving
performance through the second half, after the strategic
initiatives we implemented from Q1 2025. North America delivered a
quarter-on-quarter improvement in Organic Revenue Growth and in the
value of the contract portfolio. Organic Revenue Growth in our
International business accelerated to 3.4% in the second half with
solid demand in the UK, Southern Europe, India and Indonesia. This
performance, alongside continued cost discipline, delivered Group
Adjusted Operating Profit Growth of 5.4%.
"In North America, we are continuing to execute our evolved
marketing and multi-brand strategy. Informed by the strong growth
in leads from our regional brand strategy, we are planning to
retain 30 national, regional and local brands that represent over
90% of our revenue. Retaining more local brands and their branches,
and expanding our network of small, local branches following the
success of our first 150 satellite branches, will give us greater
customer proximity and a stronger local brand presence across a
total branch network of around 800 by the end of 2026. This,
combined with an enhanced and streamlined approach to systems
migration, simplifies the remaining integration.
"We have made good progress in cash generation and cost discipline
across the Group. Free Cash Flow Conversion of 98% is ahead of
expectations and we have reduced leverage to 2.6x. Our efficiency
programme has made a good start, and we remain on track to deliver
the c.$100m cost reduction opportunity and an operating margin for
North America above 20% in 2027.
"It is encouraging to see the strategic initiatives we put in place
at the start of this year driving an improved performance. There is
still more to do, building on this progress, to fully realise the
potential of this business. Our leading positions in the North
American pest market, and other key global markets, provide a solid
foundation and mean we are well-placed to capitalise on strong
industry growth forecasts for the coming years. In the short term,
whilst recent geopolitical events create uncertainty, our plans to
further increase growth and margins give us confidence in
delivering a 2026 performance in line with market expectations. As
I pass the baton to Mike, I would like to extend my sincere
gratitude to all of our colleagues for their dedication and hard
work throughout my 12 years as CEO."
|
Organic Revenue Growth
|
Q1
|
Q2
|
Q3
|
Q4
|
H1
|
H2
|
Full Year
|
|
Group
|
1.6%
|
1.6%
|
3.4%
|
3.5%
|
1.6%
|
3.5%
|
2.6%
|
|
North America
|
0.7%
|
1.4%
|
3.4%
|
3.6%
|
1.1%
|
3.5%
|
2.3%
|
|
North
America Pest Control Services
|
-0.2%
|
0.3%
|
1.8%
|
2.6%
|
0.1%
|
2.2%
|
1.1%
|
|
North
America Business Services
|
5.6%
|
9.2%
|
11.9%
|
7.8%
|
7.8%
|
9.8%
|
8.9%
|
|
International
|
3.2%
|
2.0%
|
3.4%
|
3.4%
|
2.6%
|
3.4%
|
3.0%
|
2025
Financial Highlights1
|
●
|
Q4 Group Organic Revenue Growth1 of
3.5% including 3.6% in North America and 3.4% in
International.
|
|
●
|
Q4 North America Pest Control Services Organic Growth of 2.6%, up
from 1.8% in Q3 and 0.1% in H1.
|
|
●
|
FY25 Group Organic Revenue Growth of 2.6%, with improved
performance in the second half.
|
|
●
|
Group Adjusted Operating Profit1 up
5.4%, with 16.7% growth in H2 benefiting from the phasing of cost
efficiency initiatives in North America.
|
|
●
|
Group Adjusted Operating Margin1 of
15.5%, up 0.3%pts. North America Operating Margin of 17.4%, up
0.4%pts.
|
|
●
|
Additional provision for Termite Damage claims in H2 of $122m,
taking the total for FY25 to $201m. After $95m of cash-settled
claims in 2025, closing provision of $384m. Current estimate for
2026 cash outflow at similar levels to 2025.
|
|
●
|
Free Cash Flow1 of
$615m, up 24.5% year-on-year, and Free Cash Flow Conversion of 98%,
ahead of guidance due to real-estate sales and some one-off
benefits within the overall working capital
improvement.
|
|
●
|
Net debt to Adjusted EBITDA1 ratio
reduced to 2.6x (FY24: 2.9x), after a $181m adverse foreign
exchange impact on translation of year end net
debt.
|
|
●
|
Recommended final dividend of 8.24 cents, up 4.6%; total FY25
dividend of 12.39 cents, up 3%.
|
2025 Strategic and Operational Highlights
North America Pest Control: Quarter-on-Quarter improvement in
Organic Growth
At the start of 2025, we implemented a number of strategic
initiatives focused on growth and increasing the value of our
contract portfolio through winning new customers, retaining
existing customers and pricing discipline. This evolved strategy
has delivered an improved performance.
|
●
|
Refocused marketing investment towards organic lead generation and
more efficient paid marketing delivered growth in residential lead
flow of 7.1% in H2 and a double-digit reduction in cost per
lead.
|
|
●
|
Investment behind additional regional brands delivered strong
growth in lead flow.
|
|
●
|
Over 150 smaller, local branches open under the satellite programme
- which has boosted customer proximity and reviews, and lead
generation.
|
|
●
|
Moved sales accountability back into branches, driving up visits
per day and services proposed.
|
|
●
|
Encouraging summer door-to-door pilot in 25 sales territories with
planned expansion to 40 territories in 2026.
|
|
●
|
Focus on leadership in underperforming branches - over 90 branch
manager changes during the year.
|
|
●
|
Sustained pricing discipline with price increases slightly above
inflation.
|
|
●
|
North America customer retention improved to 80.5%. (FY24:
80.1%).
|
|
●
|
North America colleague retention improved to 82.2%. (FY24: 79.4%),
+12%pts in the last 3 years.
|
North America Pest Control: Streamlining operations - Brands,
Branches and Systems
|
●
|
Building on the success of our broader brand strategy and enhanced
data analysis, we are now planning to retain 30 national, regional
and local brands with strong brand equity covering over 90% of
revenues to maximise demand penetration.
|
|
●
|
We are expanding our network of small, local branches from the
satellite programme, and retaining more local brands and their
branches, which will take our network to around 800 highly targeted
locations to maximise customer proximity and market demand
penetration, yielding a strong return on investment.
|
|
●
|
Pausing integration and evaluating how to simplify our approach has
led to an in-development BI (Business Intelligence) tool allowing
multiple systems to be maintained, significantly reducing the
operational impact of branch integrations.
|
|
●
|
We are encouraged by the results from the Commercial branch
migrations and now have 75% of our Commercial revenues consolidated
under dedicated branch and regional leadership.
|
|
●
|
We have begun the roll-out of a simplified remuneration approach
for Commercial sales and designed a harmonised pay policy for new
service colleagues which offers a 'grandfathering' choice for
existing colleagues.
|
North America: Business simplification and cost
efficiencies
|
●
|
Cost efficiency initiatives remain on track to deliver a cost
reduction of c.$100m in 2027 compared to an inflation-adjusted 2024
base. Initiatives include streamlining and simplifying the business
through Global Capability Centres, outsourcing, procurement and
digital enablement, with $25m savings delivered in
2025.
|
|
●
|
In 2027, these cost savings and an improved organic growth rate,
are expected to deliver a North America Operating Profit margin
above 20%.
|
International: Improved second half performance
|
●
|
FY25 Organic Revenue Growth of 3.0% converted into Adjusted
Operating Profit Growth of 5.7% with Adjusted Operating Profit
margin of 19.8%, up 0.2%pts year-on-year.
|
|
●
|
H2 Organic Revenue Growth of 3.4% after 2.6% in H1.
|
|
●
|
Good volumes and a strong demand and pricing environment across our
scale markets of the UK, the Southern European markets of Spain and
Portugal and the faster growing economies of Indonesia and
India.
|
|
●
|
We are assessing further cost efficiency opportunities across our
International businesses.
|
Investing in data capabilities, product innovation and AI to drive
performance and productivity
|
●
|
Through 2025, we invested in capabilities to capture the
opportunity of data and to enable AI usage:
|
|
|
|
-
|
The roll-out of Gemini to c.63,400 colleagues is expected to
improve productivity over time.
|
|
|
-
|
In-house "RAT-GPT" portal launched with over 100 AI agents in
development to support growth and efficiency such as a new model
which prioritises leads based on factors such as likelihood to
convert, sales value and future customer value.
|
|
●
|
The focus in 2026 is on advancing these AI agents to further drive
productivity and operational excellence.
|
|
|
●
|
We continue to leverage the investments made in product innovation
as a competitive advantage with over 600,000 Pest Connect devices
now in operation.
|
|
Ongoing investment in bolt-on M&A: 36 businesses with revenues
of c.$63m in year prior to purchase acquired for $115m
|
●
|
FY25 spend of $115m was below our guidance, with a number of deals
slipping into 2026. Our pipeline of potential deals leading into
2026 is healthy, and at this time we expect to spend around $200m
on M&A in 2026.
|
Appointment of new Chief Executive
On 13 January 2026 we announced the appointment of Mike Duffy as
Chief Executive (CEO) and Executive Director. Mike joined as CEO
Designate on 16 February and will become CEO on 16 March. Andy
Ransom (CEO) and Paul Edgecliffe-Johnson (CFO) will host the FY25
virtual results presentation to be held today, 5 March
2026.
2026 Outlook
|
●
|
Despite some weather-related disruption in North America in
January, and increased uncertainty from recent geopolitical events,
we expect to deliver FY 2026 financial results in line with market
expectations.
|
Enquiries:
|
Investors / Analysts:
|
Heather Wood
|
Rentokil Initial plc
|
+44 7808 098793
|
|
Media:
|
Malcolm Padley
|
Rentokil Initial plc
|
+44 7788 978199
|
A management presentation and Q&A for investors and analysts
will be held virtually today, 5 March 2026 at 8.30am (UK time).
Dial-in details will be provided on the website
(https://www.rentokil-initial.com/investors.aspx). A recording will
be made available following the conclusion of the
presentation.
Notes
With effect from 1 January 2025 the Group changed its presentation
currency from sterling to US dollars. All comparatives from 2024
have been represented in US dollars. In addition and following the
acquisition of the Terminix business whereby the majority of the
Group's revenues are now in North America, the Group's remaining
regions have been combined into an International segment and
reporting is on this basis. In order to help understand the
underlying trading performance, unless otherwise stated, all
commentary and comparable analysis in the summary and operating
review relates to the continuing operations of the Group on a
constant currency basis. The France Workwear business has been
classified as a discontinued operation since 31 May 2025 following
the announcement of the sale of the business which completed on 30
September 2025, and all comparatives have been represented
accordingly.
1 Non-IFRS measures - This statement includes certain financial
performance measures which are not measures defined under
International Financial Reporting Standards (IFRS). These measures
include Adjusted Operating Profit, Adjusted Profit Before Tax,
Adjusted Profit After Tax, Adjusted EBITDA, Adjusted Interest,
Adjusted Earnings Per Share, Free Cash Flow, Adjusted Free Cash
Flow, Adjusted Free Cash Flow Conversion, Adjusted Effective Tax
Rate and Organic Revenue. Management believes these measures
provide valuable additional information for users of the financial
statements to aid better understanding of the underlying trading
performance. Adjusted Operating Profit, Adjusted Profit
Before/After Tax and Adjusted EBITDA exclude certain items that
could distort the underlying trading performance of the business.
An explanation of all the above non-IFRS measures used along with
reconciliation to the nearest IFRS measures is provided in Use of
Non-IFRS measures in the financial statements.
Summary of financial performance
Regional Performance
|
|
Revenue
|
|
Adjusted Operating Profit
|
|||||
|
|
2025
$m
|
2024
$m
|
Change
(constant
currency)
%
|
Organic
Revenue
Growth
%
|
2025
$m
|
2024
$m
|
Change
(constant
currency)
%
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Pest
Control
|
4,148
|
4,026
|
3.1%
|
2.2%
|
|
720
|
688
|
4.7%
|
|
Hygiene
& Wellbeing
|
146
|
138
|
6.0%
|
4.0%
|
|
29
|
25
|
17.8%
|
|
|
4,294
|
4,164
|
3.2%
|
2.3%
|
|
749
|
713
|
5.1%
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Pest
Control
|
1,555
|
1,455
|
5.4%
|
3.7%
|
|
323
|
299
|
5.2%
|
|
Hygiene
& Wellbeing
|
1,059
|
998
|
4.0%
|
2.0%
|
|
195
|
180
|
6.5%
|
|
|
2,614
|
2,453
|
4.8%
|
3.0%
|
|
518
|
479
|
5.7%
|
|
|
|
|
|
|
|
|
|
|
|
Central
|
|
|
|
|
|
(191)
|
(175)
|
(6.9)%
|
|
Restructuring costs
|
|
|
|
|
|
(6)
|
(9)
|
35.7%
|
|
Total
|
6,908
|
6,617
|
3.8%
|
2.6%
|
|
1,070
|
1,008
|
5.4%
|
Category Performance
|
|
Revenue
|
|
Adjusted Operating Profit
|
|||||
|
|
2025
$m
|
2024
$m
|
Change
(constant
currency)
%
|
Organic
Revenue
Growth
%
|
2025
$m
|
2024
$m
|
Change
(constant
currency)
%
|
|
|
Pest Control
|
5,703
|
5,481
|
3.7%
|
2.6%
|
|
1,043
|
987
|
4.9%
|
|
Hygiene & Wellbeing
|
1,205
|
1,136
|
4.3%
|
2.3%
|
|
224
|
205
|
7.8%
|
|
Central
|
-
|
-
|
-
|
-
|
|
(191)
|
(175)
|
(6.9)%
|
|
Restructuring costs
|
-
|
|
-
|
-
|
|
(6)
|
(9)
|
35.7%
|
|
Total
|
6,908
|
6,617
|
3.8%
|
2.6%
|
|
1,070
|
1,008
|
5.4%
|
Revenue
Group Revenue increased 3.8% to $6,908m (FY24: $6,617m) driven by a
strong demand and pricing environment across our scale markets.
Group Organic Revenue grew 2.6%. Revenue growth in North America
was 3.2% driven primarily by pricing. Organic Revenue Growth was
2.3%, with improvements through the year (Q1:0.7%; Q2:1.4%;
Q3:3.4%; Q4:3.6%). The International business grew Revenue 4.8% for
the full year with growth across the region particularly in the UK,
Southern Europe and the faster growing economies of India and
Indonesia. Organic Revenue Growth was up 3.0%.
Our Pest Control category grew Revenue by 3.7% to $5,703m. Organic
Revenue Growth was 2.6% with 2.2% Organic Revenue Growth in North
America and 3.7% Organic Revenue Growth in International being
driven primarily by pricing. Hygiene & Wellbeing Revenue
increased by 4.3% to $1,205m. Organic Revenue Growth was up
2.3%.
|
Revenue ($m)
|
H1
|
H2
|
Full Year
|
|
Group
|
3,364
|
3,544
|
6,908
|
|
North America
|
2,106
|
2,188
|
4,294
|
|
International
|
1,258
|
1,356
|
2,614
|
|
Organic Revenue Growth
|
H1
|
H2
|
Full Year
|
|
Group
|
1.6%
|
3.5%
|
2.6%
|
|
North America
|
1.1%
|
3.5%
|
2.3%
|
|
International
|
2.6%
|
3.4%
|
3.0%
|
Profit
Adjusted Operating Profit increased by 5.4% during the year to
$1,070m (FY24: $1,008m) reflecting revenue growth of 3.8% and the
benefit of cost efficiency activities. Performance reflected
improved results across the Group, with growth delivered in both
North America and International. Adjusted Operating Profit for Pest
Control increased by 4.9% to $1,043m (FY24: $987m). Hygiene &
Wellbeing Adjusted Operating Profit increased by 7.8% to $224m
(FY24: $205m).
Adjusted Operating Profit growth was 16.7% in the second half of
the year with the benefits from cost efficiency initiatives in
North America being weighted to later in the year.
Adjusted Operating Profit margin of 15.5% increased 0.3%pts
year-on-year. There was consistent growth across the Group with
year-on-year growth in North America of 0.4%pts and International
of 0.2%pts. On a category basis, Adjusted Operating Profit margins
in Pest Control grew 0.2%pts and by 0.6%pts in Hygiene &
Wellbeing.
Adjusted Profit Before Tax, which excludes one-off and adjusting
items and amortisation costs, was $876m (FY24: $842m). Adjusted
interest was $204m, $29m higher year-on-year due to the interest
cost of new bond debt issued, lower bank interest received and a
reduction in the impact from hyperinflation accounting. One-off and
adjusting operating items of $287m (FY24: $110m) include an
increase in the provision for termite claims and costs related to
North America transformation and other strategic initiatives.
Statutory Operating Profit was $584m (FY24: $644m). Statutory
Profit Before Tax was $390m (FY24: $462m).
|
Adjusted Operating Profit ($m)
|
H1
|
H2
|
Full Year
|
|
Group
|
511
|
559
|
1,070
|
|
North America
|
356
|
393
|
749
|
|
International
|
242
|
276
|
518
|
|
Adjusted Operating Profit Margin
|
H1
|
H2
|
Full Year
|
|
Group
|
15.2%
|
15.8%
|
15.5%
|
|
North America
|
16.9%
|
18.0%
|
17.4%
|
|
International
|
19.2%
|
20.4%
|
19.8%
|
Cash flow
Cash generation remained a key focus during the year, supported by
continued discipline in operational cash conversion and working
capital management.
Free Cash Flow from continuing operations was $615m (FY24: $494m),
with the improvement driven principally by the higher profits and
improved working capital position, partly offset by higher cash
interest. Free Cash Flow for the Group including discontinued
operations was $636m (FY24: $526m), $110m higher
year-on-year.
Free Cash Flow Conversion of 98% exceeded our guidance as a result
of a particularly strong performance in debtor collection across
the Group.
One-off and adjusting items (non-cash) were an outflow of $214m
(FY24: $19m). The Group had a $59m working capital outflow in the
year (FY24: $126m outflow). The movement on provisions was a $142m
inflow (FY24: $76m outflow), primarily reflecting the increase in
the provision for termite damage claims of $201m offset by the $95m
of cash settled claims. Capital expenditure additions were $196m
(FY24: $190m), with disposals of property, plant and equipment of
$20m (FY24: $5m). Lease payments were $186m (FY24:
$177m).
Cash interest payments were $222m, $41m higher than the prior year,
reflecting the impact of refinancing existing debt at higher
prevailing rates. Cash tax payments were lower year-on-year at
$100m (FY24: $107m) mainly due to a one-off benefit from a change
to US tax legislation. Free Cash Flow from discontinued operations
was $21m (FY24: $32m).
Cash spend on current and prior year acquisitions was $121m,
receipts from the disposal of France Workwear were $391m, dividend
payments were $304m and the cash impact of one-off and adjusting
items was $100m, largely related to North America transformation
costs.
Regional performance review
North America
|
|
2025
$m
|
2024
$m
|
Change
(reported)
%
|
Change
(constant
currency)
%
|
Organic
Growth
|
|
Revenue
|
4,294
|
4,164
|
3.1%
|
3.2%
|
2.3%
|
|
Pest Control
|
4,148
|
4,026
|
3.0%
|
3.1%
|
2.2%
|
|
Pest Control Services
|
3,501
|
3,430
|
2.1%
|
2.1%
|
1.1%
|
|
Business Services
|
647
|
596
|
8.6%
|
8.7%
|
8.9%
|
|
Hygiene & Wellbeing
|
146
|
138
|
5.8%
|
6.0%
|
4.0%
|
|
Operating Profit
|
413
|
534
|
(22.7%)
|
(22.6%)
|
|
|
Adjusted Operating Profit
|
749
|
713
|
5.0%
|
5.1%
|
|
|
Adjusted Operating Margin
|
17.4%
|
17.1%
|
0.3%pts
|
0.4%pts
|
|
|
Organic Growth
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
|
North America
|
0.7%
|
1.4%
|
3.4%
|
3.6%
|
2.3%
|
|
North America Pest Control Services
|
-0.2%
|
0.3%
|
1.8%
|
2.6%
|
1.1%
|
|
North America Business Services
|
5.6%
|
9.2%
|
11.9%
|
7.8%
|
8.9%
|
2025 Performance
Full year Revenue was up 3.1% to $4,294m and by 3.2% at constant
currency. Organic Revenue was up 2.3%. Performance improved in the
second half, with H2 Organic Revenue Growth of 3.5% (H1: 1.1%). A
robust pricing environment supported strong price realisation, with
the measures implemented to drive up customer retention and
increase new business contributing to an easing of volume
reductions through the year.
North America Pest Control Services delivered an encouraging
quarterly sequential improvement in Organic Revenue Growth
including 2.6% in Q4.
North America Business Services continued to see positive momentum
through the year with H2 revenues of $341m (H1: $306m). Organic
Revenue Growth was 9.8% (H1:7.8%). Our distribution business
delivered double-digit Organic Revenue Growth in the year, and Q4
was boosted by a good performance from our lake management
business.
Adjusted Operating Profit increased by 5.1% to $749m. Adjusted
Operating Profit margin was 17.4%, up 0.4%pts on the prior year,
reflecting some early benefit from the business simplification and
cost efficiency programme. Statutory Operating Profit was $413m
(FY24: $534m).
Colleague retention increased to 82.2% (FY24: 79.4%) and customer
retention improved to 80.5% (FY24: 80.1%).
Bolt-on M&A activity continued, with 12 acquisitions completed
(FY24: 13) with combined revenues of c.$27m in the year prior to
acquisition. We continue to selectively pursue high quality M&A
assets in the North America region.
Improving profitable growth in North America - 2025
progress
At the beginning of 2025, we set out our evolved strategy to
improve Organic Revenue Growth by strengthening the core
performance drivers of customer retention, colleague retention and
growth in lead volumes. These 2025 activities have delivered
encouraging results with improving growth in leads through the
year, with 7.1% growth in the second half, and growth in the value
of our contract portfolio.
Enhanced digital marketing and investment in brand
awareness
During the year we refocused our marketing investment towards more
efficient, higher return opportunities with a stronger focus on
organic lead generation and building brand awareness for long-term
brand health.
We have supported growth in leads through search engine
optimisation activity with new digital content, improved local web
pages and awareness campaigns. In total we have launched over 400
new branch, metro and state pages across our major brands. For
Terminix alone, in Q4, this drove a five-fold increase in the
number of times the brand appeared in 'exterminator near me'
searches. We have also evolved content to maximise AI optimisation
driving significant increases in our brands' appearances in AI
searches.
This activity has all been supported by, and continues to evolve
through, a focus on data-driven marketing performance and
efficiency, and we can measure its success through a double-digit
reduction in the cost of each lead and a meaningful shift in the
proportion of organic leads.
Elevating our local marketing execution will remain in focus in
2026, with continued investment in data and insights to better
target the highest value leads with the strongest conversion
rates.
Improved customer proximity and local lead generation
In Q4 2024, we started a successful pilot of satellite branches.
These are smaller branches that are fully branded and operational,
serving as localised hubs with active facilities, but have a low
cost to operate. These branches increase local community presence,
customer proximity and lead growth in key metro areas with
high-value untapped customer demand. We continued the roll-out
through 2025, taking the total number of these smaller, local
branches to over 150. As these branches mature their performance
improves and by Q4, branches with these localised hubs connected to
them recorded lead flow more than double that of branches without.
In 2026, we will expand this network of smaller, local branches and
expect to have around 220 by the end of the year.
Strengthened sales execution
At the beginning of 2025 we integrated sales teams back into field
operations leadership at the branch level to drive local
accountability with measurable results. By the second half we had
improved key metrics of sales visits per day and services proposed.
There is even more to do in 2026 to focus on execution and
conversion. We successfully piloted door-to-door sales across 25
territories to penetrate an additional fast-growing sales channel
for residential contracts in the peak US pest season. We expect to
extend this to cover around 40 territories in 2026.
Driving up customer retention through focus on customer
satisfaction
We have continued to execute the 'Drive to 85' programme to improve
customer retention over time to be closer to the average outside
North America. This requires a relentless focus on improving the
overall quality of end-to-end service through getting the basics
right including service adherence, speed of sale to install,
customer communications and billing and scheduling. Our State of
Service rate for 2025 was 99%, a strong indication we are
delivering on customer expectations. We have had success reducing
billing friction through initiatives such as autopay and the
investment in the 'Customer Saves' team at the start of the year
has delivered good results.
Another source of improving customer satisfaction has been through
investment in the Trusted Advisor programme, training field
technicians to build sticky relationships based on delivery of
high-value advice and comprehensive pest prevention solutions in
addition to recommendations for add-on services, which also
provides an additional source of leads. Participation in the
Trusted Advisor programme is up 5% year-on-year to
61.5%.
Overall, we have seen a 5.3 point year-on-year improvement in US
Commercial Pest customer Net Promoter Scores (NPS), with a 3.1
point year-on-year increase for US Residential customers, and an
improvement in customer retention of 0.4%pts to 80.5% in North
America. This is a metric which is moving slowly, but where we see
significant opportunity.
Investing in key capabilities - pricing and data
One of the key drivers of increase in the value of our contract
portfolio is pricing. There remains significant opportunity to
optimise pricing (e.g. through pricing segmentation) and in 2025 we
invested in new leadership and a new team in this area. There is
also a clear opportunity to drive performance through the
increasing use of data science and analytics across the
organisation, which we have also invested behind in 2025 with new
leadership and a new team.
Leveraging data and analytics
Through 2025 we focused on improving our data and analytics, with
one of the key benefits being a more granular branch-level
assessment of performance across a full suite of metrics. We used
this insight to inform targeted growth initiatives, including
replacing branch-level leadership across over 90 branches resulting
in meaningful levels of acceleration in growth.
Business simplification and cost efficiencies
At the same time as driving Organic Revenue Growth we are focused
on business simplification and efficiency. We made good progress in
2025 towards our target of a $100m cost reduction in 2027 from the
inflation-adjusted 2024 spend level. A number of efficiency
programmes are underway to deliver this including a headcount
reduction programme during the period, procurement initiatives to
benefit from purchasing scale and the use of outsourcing and Global
Capability Centres for back-office roles. In 2025 these initiatives
delivered in-year savings of $25m.
We continue to expect that, in 2027, the delivery of these cost
savings, together with an improved organic growth rate, will allow
the North American business to achieve Operating Profit margins of
above 20%, whilst delivering on the streamlined integration
process, supported by enhanced marketing investment and the
increased branch network.
During the year we incurred one-time costs to achieve these savings
(cash and non-cash) of $77m. We currently expect further one-time
costs in 2026 in the region of $70m.
Streamlining operations in 2026
At the start of 2025, we paused integration activity and began the
implementation of an evolved strategy to optimise the combination
of the Rentokil and Terminix businesses. As we move into 2026, we
will continue to progress this strategy with a substantially
streamlined approach which simplifies further integration activity
across brands, branches, systems and pay plans.
Optimising Brand strategy
In 2025, we laid out a plan to focus on two national brands and
nine well-known regional brands. This focus has increased leads for
these brands substantially in the second half. Further data
analysis confirms that growth is optimised with multiple brand
entry points to tap into highly localised residential and SME
demand across national, regional and local brands with strong brand
equity.
We now plan to retain around 30 brands which represent over 90% of
our revenues. Over time we will carefully and progressively retire
the remainder, shifting that business to the stronger and more
salient retained brands.
Optimising Branch strategy
Our evolved branch strategy prioritises local customer proximity
and protects service quality and customer retention by keeping more
local brands and their branches, and by expanding our network of
small, local branches from the satellite programme. Our plan is to
create a high-quality network of around 800 branches by the end of
2026, including around 220 of the small, local branches. This
evolved strategy will minimise change across branches and
technicians, which will support customer retention.
Simplified Systems approach
Following the pause in integration in 2025 we have developed an
alternative approach which uses branch data from our existing
systems (Mission and PestPac) to build an integrated Branch 360
data reporting, insight and action system accessed through a
unified branch BI (Business Intelligence) scorecard which delivers
consistent KPIs and insight into the field on how to leverage best
practice and target underperforming branches with suggested areas
of action. This dashboard enhances the user experience driving
accountability for performance, with ongoing development from
initial pilot phases already underway.
For Commercial branches, systems migration resumed in Q4 2025 with
encouraging results. This will continue in 2026, enabling all
Commercial customers to access our online portal, PestNet Online,
as we consolidate on a single branch system.
Integrating Pay Plans
The de-coupled approach on systems allows for the harmonisation of
pay plans to proceed without the need to complete branch-by-branch
IT migration. We have completed the harmonisation of pay plans for
branch managers, updated Commercial sales plans to better
incentivise performance and there will be no change to Residential
sales colleagues plans in 2026. For our Technician colleagues,
future changes will involve onboarding new colleagues to the new
plans, while existing colleagues will be offered a 'grandfathering'
choice between old and new plans to ensure stability and talent
retention.
We are confident this revised plan to optimise the combination of
Rentokil and Terminix in North America mitigates further risk of
disruption while still allowing us to deliver on our North America
margin target of over 20% in 2027. Our plan for more branches and
fewer brand combinations bolsters our local presence, maximises our
penetration of highest value demand and minimises fewer technician
changes, protecting customer retention. Retaining our existing
systems reduces risks to growth, and incremental investment through
2025 gives us confidence we can deliver the right data and insights
to support performance and satisfy customer
expectations.
During 2026, we will also remain focused on building momentum in
sales and operations through driving accountability and disciplined
execution and delivering on a renewed focus on Commercial as a key
growth segment through improved service, industry leading offerings
and dedicated local and national resources.
International
|
|
2025
$m
|
2024
$m
|
Change
(reported)
%
|
Change
(constant
currency)
%
|
Organic
Growth
|
|
Revenue
|
2,614
|
2,453
|
6.6%
|
4.8%
|
3.0%
|
|
Operating Profit
|
451
|
377
|
19.6%
|
16.8%
|
|
|
Adjusted Operating Profit
|
518
|
479
|
8.1%
|
5.7%
|
|
|
Adjusted Operating Margin
|
19.8%
|
19.5%
|
0.3%pts
|
0.2%pts
|
|
|
Organic Growth
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
|
International
|
3.2%
|
2.0%
|
3.4%
|
3.4%
|
3.0%
|
2025 Performance
Revenue
Full year Revenue was up 6.6% to $2,614m and by 4.8% at constant
currency. Organic Revenue was up 3.0%. Performance improved in the
second half, with H2 Organic Revenue Growth of 3.4% (H1:
2.6%).
Europe incl. LATAM saw the strongest growth in the region, driven
by the Southern European markets of Spain and Portugal which
experienced good volume growth from healthy overall demand and a
solid pricing environment.
The UK & Sub-Saharan Africa region and Asia & MENAT also
saw good growth. In the UK this was driven by the core UK Pest
Control and Plants businesses and an improving performance from our
Property Services division in H2. In Asia there was strong growth
in Indonesia and India benefiting from underlying demand growth in
these fast-growing economies.
Growth in the Pacific region was softer across both one-off and
contract revenue primarily due to weather related challenges which
particularly impacted rural and trackspray operations in the
year.
Profit
Adjusted Operating Profit in our International region increased by
8.1% to $518m and by 5.7% at constant currency. Adjusted Operating
Margin was 19.8%, up 0.2%pts on the prior year. Statutory Operating
Profit was $451m, up 19.6% year-on-year (FY24: $377m).
The UK and Sub-Saharan Africa region delivered double-digit growth
in Adjusted Operating Profit reflecting the strong revenue
performance.
Europe and Asia & MENAT also delivered Adjusted Operating
Profit growth ahead of the regional average, with Asia &
MENAT's margins demonstrating resilience despite a backdrop of high
wage inflation.
Within the Pacific region, Operating Profit grew slower than the
overall International region, consistent with the revenue
growth.
Colleague retention of 90.3% was slightly below last year (FY24:
90.5%) with small dips from exceptionally high levels in Asia and
Latin America. Customer retention improved to 85.7% (FY24:
85.1%).
The International region acquired 24 businesses with total revenues
in the year prior to acquisition of $36m.
Category performance review
Pest Control
|
|
2025
$m
|
2024
$m
|
Change
(reported)
%
|
Change
(constant
currency)
%
|
Organic
Growth
|
|
Revenue
|
5,703
|
5,481
|
4.1%
|
3.7%
|
2.6%
|
|
Operating Profit
|
635
|
715
|
(11.2%)
|
(12.1%)
|
|
|
Adjusted Operating Profit
|
1,043
|
987
|
5.7%
|
4.9%
|
|
|
Adjusted Operating Margin
|
18.3%
|
18.0%
|
0.3%pts
|
0.2%pts
|
|
|
Organic Growth
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
|
Pest Control
|
1.7%
|
1.9%
|
3.4%
|
3.4%
|
2.6%
|
Our Pest Control business is the largest operator in both the US,
the world's biggest pest control market, and the world overall,
providing services in around 90 markets. We are a leading global
player in a resilient and non-cyclical industry characterised by
positive and strong long-term structural growth
drivers.
Market
According to latest reports, published in 2025, over the past 10
years the global pest control market has grown from a value of
$15.4bn in 2015 to $29.0bn in 2025 at a CAGR of 6.6%. Industry
forecasts for the next 10 years deliver a CAGR of 6.2% - with the
value of the global market expected to reach around $50bn by
2034.
2025 Performance
Pest Control Revenue increased by 4.1% to $5,703m (FY24: $5,481m)
and by 3.7% at constant currency. Organic Revenue Growth was
2.6%.
Within the North America business, good revenue growth of 3.1%
included 2.1% in Pest Control Services and 8.7% in Business
Services supported by a robust pricing environment and a
particularly strong performance from Target Specialty Products in
Business Services. Organic Revenue Growth was 2.2%, with 1.1% in
Pest Control Services and 8.9% in Business Services.
Within the International business, good revenue growth of 5.4% was
driven principally by strong performances in Europe, the UK and
Asia & MENAT, benefiting from favourable economic trends, the
roll-out of digital solutions, resilient pricing and strong sales
leadership. Organic Revenue Growth was 3.7%.
Adjusted Operating Profit increased by 5.7% to $1,043m (FY24:
$987m) and by 4.9% at constant currency, with Adjusted Operating
Profit Margin increasing to 18.3% (FY24: 18.0%). Statutory
Operating Profit decreased by 11.2% to $635m (FY24:
$715m).
Pest Control represented 83% of Group Revenue and 82% of Group
Adjusted Operating Profit.
We acquired 31 Pest Control businesses in the period, with revenues
in the year prior to acquisition of c.$55m.
Hygiene & Wellbeing
|
|
2025
$m
|
2024
$m
|
Change
(reported)
%
|
Change
(constant
currency)
%
|
Organic
Growth
|
|
Revenue
|
1,205
|
1,136
|
6.1%
|
4.3%
|
2.3%
|
|
Operating Profit
|
230
|
196
|
17.3%
|
15.9%
|
|
|
Adjusted Operating Profit
|
224
|
205
|
9.3%
|
7.8%
|
|
|
Adjusted Operating Margin
|
18.6%
|
18.0%
|
0.6%pts
|
0.6%pts
|
|
|
Organic Growth
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
|
Hygiene & Wellbeing
|
1.6%
|
0.2%
|
3.2%
|
3.9%
|
2.3%
|
Rentokil Initial is a leader in the provision of hygiene and
wellbeing services, operating in around 70 markets around the
world. Inside the washroom we provide hand hygiene (soaps and
driers), air care, in-cubicle (feminine hygiene units), no-touch
products and digital hygiene services. In addition to core washroom
hygiene, we deliver specialist services outside the washroom such
as premium scenting, plants, air quality monitoring, green walls
and specialist waste collection services.
Market
According to latest industry reports, over the next 10 years the
global Core Hygiene market is expected to grow at a CAGR of
approximately 4%, driven by macro factors including the needs of an
ageing population, the rise of urban populations and middle
classes, and increasing hygiene expectations.
2025 Performance
Hygiene & Wellbeing Revenue increased by 6.1% to $1,205m (FY24:
$1,136m) and by 4.3% at constant currency. Organic Revenue Growth
was 2.3%. Growth was driven principally by key markets in Europe,
UK & Sub-Saharan Africa.
Adjusted Operating Profit increased by 9.3% to $224m (FY24: $205m)
and by 7.8% at constant currency with Asia & MENAT and UK &
Sub-Saharan Africa growing profits ahead of revenue. Adjusted
Operating Margin increased to 18.6% (FY24: 18.0%). The profit
performance reflected the benefit of pricing and productivity
initiatives, alongside continued cost discipline, which more than
offset inflationary pressures. Statutory Operating Profit increased
by 17.3% to $230m (FY24: $196m).
For FY25, Hygiene & Wellbeing represented 17% of Group Revenue
and 18% of Group Adjusted Operating Profit.
We acquired 5 Hygiene & Wellbeing businesses in the period with
revenues of c.$8m in the year prior to acquisition.
Disposal of France Workwear
The sale of our France Workwear business, which we announced on 28
May 2025, completed on 30 September 2025, with net cash proceeds of
€339m ($397m). The business has been accounted for as a
discontinued operation since 31 May 2025. In FY24, France Workwear,
including flat linen textile and clean room business, generated
Revenue of $324m, Adjusted Operating Profit of $57m and had
associated capital expenditure of $93m. For the nine months ended
30 September 2025, France Workwear, including flat linen textile
and clean room business, generated Revenue of $261m and Adjusted
Operating Profit of $74m.
Good contributions from bolt-on M&A
In 2025, we acquired 36 businesses, comprising 31 in Pest Control
and 5 in Hygiene & Wellbeing for a total consideration of
$115m. Revenues in the year prior to purchase were c.$63m. We added
12 new businesses in North America during the period and 24
businesses in our International region. Revenues acquired in the
year prior to purchase were c.$27m and c.$36m
respectively.
M&A remains relevant for our strategy for growth. We continue
to seek attractive bolt-on deals, both in Pest Control and Hygiene
& Wellbeing, to build density in existing and new markets. Our
pipeline of prospects remains strong.
Employer of Choice
Rentokil Initial is committed to being a world-class Employer of
Choice, with colleague safety and the attraction, recruitment and
retention of the best people from the widest possible pool of
talent, being key business objectives globally.
Group colleague retention continued to rise at 87.4% (FY24:
86.3%).
Innovation and Technology
We continue to leverage the benefits of our scale and expertise to
invest in data, innovation and technology. During 2025, we invested
to capture the full opportunity of better data and enabling AI
usage including:
|
●
|
Roll-out of Gemini for Google Workspace to our c.63,400 workforce
to aid productivity. There has been rapid take-up with over 1
million uses in the first six months.
|
|
●
|
Launch of an in-house AI Platform ('RAT-GPT') which currently has
over 100 AI agents in development to support growth and efficiency.
These include a new lead prioritisation pilot in France which
prioritises leads based on factors such as likelihood to convert,
sales value and future customer value, and, a US pilot of a
hands-free AI assistant that allows our technicians to have a
two-way conversation giving them access to the customer data they
need, such as infestation history and open actions, all while on
the move.
|
Our 2026 focus is on advancing these proven tools to further drive
productivity and operational excellence.
We also continued to leverage our investments in product innovation
as a competitive advantage with over 600,000 PestConnect devices
now in operation. Our new PestConnect Optix services now has
c.4,000 environmental monitoring cameras in use. In 2025, we
processed 4.1m images from customers' premises through our
cloud-based AI tool.
Financial review
Central and regional overheads
Central and regional overheads of $191m were up $12m at CER ($16m
at AER) on the prior year predominantly as a result of inflationary
increases and increased investment in our proprietary digital
applications, AI capabilities and IT security.
Restructuring costs
With the exception of integration costs for significant
acquisitions, the Company reports restructuring costs within
Adjusted Operating Profit. Costs associated with significant
acquisitions are reported as one-off and adjusting items and
excluded from Adjusted Operating Profit. Restructuring costs of $6m
were down $3m on prior year (FY24: $9m). They consisted mainly of
costs in respect of initiatives in our European
business.
Legacy termite warranty obligations
The legacy termite warranty provision is based on an assessment of
probable future cash outflows arising from historical and future
claims relating to the entire pool of Termite contracts acquired on
the acquisition of Terminix. It is based on a number of assumptions
including the number, and rate of claims arising, the costs
anticipated to resolve these claims, customer churn rate for this
pool of contracts, inflation and discount rate, and the actual
claim outcomes versus the assumptions which are reviewed in detail
at each half year and year end.
In the year to 31 December 2025, we have increased the termite
provision by $201m to $384m. This increase has largely been driven
by:
● A continued increase in the number of litigated
claims for both Residential and Commercial customers received in
2025 compared to 2024, albeit at a lower level than at the time of
acquisition
● A continued increase in the cost per claim, as our
proactive strategy to solve customer problems and reduce litigation
continues
● The settlement of some of the larger, legacy
complex Commercial cases at a higher average cost than the
historical average, due to the particular nature of the underlying
facts of these claims
● An increase in the long term inflation rate in the
model from 2% to 3.2%. When the original provision was booked at
the time of the acquisition a long term inflation rate was assumed
for the 20 year life of the provision. Since then we have
experienced higher levels of general inflation and, specifically,
we have seen an inflation premium over general inflation in
relation to the cost inputs for settling the claims (namely legal
defence costs, building materials and house
prices).
The cost of settling claims in the year to 31 December 2025 has
been $95m and we expect a similar level of cash payments in
2026.
Interest
Adjusted interest of $204m includes $31m of lease interest charges
and a $33m offsetting reduction from the impacts of hyperinflation
and net interest received. In the year, hyperinflation of $3m was
$6m lower than the prior year (FY24: $9m) due to a drop in
hyperinflation in Argentina and devaluation of the Argentinian
peso. Cash interest in FY25 was $222m (FY24: $181m), with the
year-on-year increase principally reflecting higher bond interest
on new debt issuance in the year and a reduction in bank interest
received.
Tax
The income tax charge for the period at actual exchange rates was
$100m on the reported Profit Before Tax of $390m, giving an
effective tax rate (ETR) of 25.6% (FY24: 25.1%). The Group's ETR
before amortisation of intangible assets (excluding computer
software), one-off and adjusting items and the net interest
adjustments for FY25 was 25.3% (FY24: 24.2%). This compares with a
blended rate of tax for the countries in which the Group operates
of 25.3% (FY24: 25.3%).
Net debt and cash flow
Group Free Cash Flow including discontinued operations was $636m,
$110m higher than the prior year, predominantly due to an improved
performance on trading and working capital. After M&A spend of
$121m, disposal receipts of $391m, dividends paid of $304m, the
cash impact of one-off and adjusting items of a $100m outflow and a
net adverse impact of foreign exchange and other items of $87m, net
debt reduced by $367m to $3,650m. The adverse foreign exchange
impact was caused by the translational impact on our EUR and GBP
denominated bonds carrying value as well as a positive impact on
our EUR denominated derivatives.
The debt related cash inflows of $532m resulted from the issuance
of the Group's inaugural USD bond transaction in April, raising
$1.25bn across two tranches; $750m 5 year bond at 5.0% and a $500m
10 year bond at 5.625%. Subsequently the Group repaid its $700m
term loan which was falling due in October 2025.
Net debt and cash flow
|
$m at actual exchange rates
|
Year to Date
|
||
|
2025
$m
|
2024
$m
|
Change
$m
|
|
|
Adjusted Operating Profit
|
1,070
|
1,008
|
62
|
|
Depreciation
|
329
|
312
|
17
|
|
Other
|
31
|
45
|
(14)
|
|
Adjusted EBITDA
|
1,430
|
1,365
|
65
|
|
One-off and adjusting items (non-cash)
|
(214)
|
(19)
|
(195)
|
|
Working capital
|
(59)
|
(126)
|
67
|
|
Movement on provisions
|
142
|
(76)
|
218
|
|
Capex - additions
|
(196)
|
(190)
|
(6)
|
|
Disposals of Property, Plant and Equipment
|
20
|
5
|
15
|
|
Capital element of lease payments and initial direct costs
incurred
|
(186)
|
(177)
|
(9)
|
|
Cash interest
|
(222)
|
(181)
|
(41)
|
|
Cash tax
|
(100)
|
(107)
|
7
|
|
Free Cash Flow - continuing operations
|
615
|
494
|
121
|
|
Free Cash Flow - discontinued operations
|
21
|
32
|
(11)
|
|
Free Cash Flow
|
636
|
526
|
110
|
|
Acquisitions
|
(121)
|
(219)
|
98
|
|
Disposal of companies and businesses
|
391
|
-
|
391
|
|
Dividends
|
(304)
|
(292)
|
(12)
|
|
Cash impact of one-off and adjusting items
|
(100)
|
(99)
|
(1)
|
|
|
|
|
|
|
Debt related cash flows
|
|
|
|
|
Cash inflow/(outflow) on settlement of debt related foreign
exchange forward contracts
|
(9)
|
(11)
|
2
|
|
Net investment in term deposits
|
-
|
(1)
|
1
|
|
Proceeds from issue of debt
|
1,232
|
-
|
1,232
|
|
Debt repayments
|
(700)
|
(464)
|
(236)
|
|
Debt related cash flows
|
523
|
(476)
|
999
|
|
|
|
|
|
|
Net increase/ (decrease) in cash and cash equivalents
|
1,025
|
(560)
|
1,585
|
|
Cash and cash equivalents at the beginning of the year
|
467
|
1,062
|
(595)
|
|
Exchange gains /(losses) on cash and cash equivalents
|
97
|
(35)
|
132
|
|
Cash and cash equivalents at end of the financial year
|
1,589
|
467
|
1,122
|
|
Net increase/(decrease) in cash and cash equivalents
|
1,025
|
(560)
|
1,585
|
|
Debt related cash flows
|
(523)
|
476
|
(999)
|
|
IFRS 16 asset/ (liability) movement
|
(3)
|
5
|
(8)
|
|
Debt acquired
|
(1)
|
(11)
|
10
|
|
Debt disposed
|
21
|
-
|
21
|
|
Bond interest accrual
|
(65)
|
(3)
|
(62)
|
|
Foreign exchange translation and other items
|
(87)
|
83
|
(170)
|
|
Decrease/(increase) in net debt
|
367
|
(10)
|
377
|
|
Opening net debt
|
(4,017)
|
(4,007)
|
(10)
|
|
Closing net debt
|
(3,650)
|
(4,017)
|
367
|
Funding
As at 31 December 2025, the Group had liquidity headroom of $2.6bn,
including $1bn of undrawn revolving credit facilities, with a
maturity date of October 2029. The Net Debt to Adjusted EBITDA
ratio was 2.6x at 31 December 2025 (31 December 2024:
2.9x).
Dividend
The Board is recommending a final dividend in respect of 2025 of
8.24 cents per share. This equates to a full-year dividend of 12.39
cents per share, up 3.0% year-on-year, in line with the Company's
progressive dividend policy. The final dividend is first determined
in US dollars and the sterling amount will be announced on 23 April
2026 using the average of the market exchange rates for the three
working days commencing 20 April 2026, using the closing spot rate.
The dividend is payable to shareholders on the register at the
close of business on 10 April 2026, to be paid on 18 May 2026. The
last day for DRIP elections is 24 April 2026.
Technical guidance update for FY26
P&L
|
●
|
One-off and Adjusting items excl. North America Transformation
costs: c.$10-$15m
|
|
●
|
North America Transformation costs*: c.$70m
|
|
●
|
P&L adjusted interest costs: c.$210m-$220m, including $5-$10m
of hyper-inflation
|
|
●
|
Estimated Adjusted Effective Tax Rate: 25%-26%
|
Cash
|
●
|
One-off and Adjusting items: c.$80m-$85m
|
|
●
|
Movement on provisions: c.$85-$95m
|
|
●
|
Capex excluding right of use (ROU) asset lease payments:
$190m-$200m
|
|
●
|
Cash interest: c.$195m-$205m
|
|
●
|
Cash tax payments: $110m-$125m
|
|
●
|
Anticipated spend on M&A in 2026 of c.$200m
|
* Reported as one-off and adjusting items and excluded from
Adjusted Operating Profit and Adjusted PBTA
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
For the year ended 31 December
|
|
Notes
|
2025
$m
|
2024
represented1
$m
|
2023
represented1
$m
|
|
Revenue
|
2
|
6,908
|
6,617
|
6,385
|
|
Operating expenses
|
|
(6,250)
|
(5,902)
|
(5,609)
|
|
Net impairment losses on financial assets
|
|
(74)
|
(71)
|
(49)
|
|
Operating profit
|
2
|
584
|
644
|
727
|
|
Finance income
|
4
|
46
|
59
|
60
|
|
Finance cost
|
3
|
(250)
|
(250)
|
(232)
|
|
Share of profit from associates net of tax
|
|
10
|
9
|
11
|
|
Profit before income tax
|
|
390
|
462
|
566
|
|
Income tax expense
|
5
|
(100)
|
(116)
|
(129)
|
|
Profit from continuing operations
|
|
290
|
346
|
437
|
|
Profit from discontinued operations
|
8
|
180
|
46
|
37
|
|
Profit for the year
|
|
470
|
392
|
474
|
|
Profit for the year attributable to:
|
|
|
|
|
|
Equity holders of the Company
|
|
470
|
392
|
474
|
|
Non-controlling interests
|
|
-
|
-
|
-
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
Items that are not reclassified subsequently to the income
statement:
|
|
|
|
|
|
Remeasurement of net defined benefit liability
|
|
1
|
-
|
-
|
|
|
|
|
|
|
|
Items that are or may be reclassified subsequently to the income
statement:
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
|
(139)
|
(35)
|
(172)
|
|
Net gain/(loss) on net investment hedge
|
|
129
|
(22)
|
136
|
|
Effective portion of changes in fair value of cash flow
hedge
|
|
(31)
|
35
|
4
|
|
Cost of hedging
|
|
-
|
(7)
|
12
|
|
Tax related to items taken to other comprehensive
income
|
|
18
|
(8)
|
7
|
|
Net exchange adjustments transferred to profit on disposal of
business
|
8
|
38
|
-
|
-
|
|
Net gain on net investment hedge transferred to profit on disposal
of business
|
8
|
(11)
|
-
|
-
|
|
Other comprehensive income for the year
|
|
5
|
(37)
|
(13)
|
|
Total comprehensive income for the year
|
|
475
|
355
|
461
|
|
Total comprehensive income for the year attributable
to:
|
|
|
|
|
|
Equity holders of the Company
|
|
475
|
355
|
461
|
|
Non-controlling interests
|
|
-
|
-
|
-
|
|
Earnings per share:
|
|
|
|
|
|
From continuing operations
|
|
|
|
|
|
Basic (cents)
|
6
|
11.49
|
13.72
|
17.37
|
|
Diluted (cents)
|
6
|
11.44
|
13.69
|
17.29
|
|
From continuing and discontinued operations
|
|
|
|
|
|
Basic (cents)
|
6
|
18.62
|
15.54
|
18.84
|
|
Diluted (cents)
|
6
|
18.54
|
15.51
|
18.75
|
1. Refer to foreign currency translation in material accounting
policies section.
Consolidated Balance Sheet
At 31 December
|
|
Note
|
2025
$m
|
2024
represented1
$m
|
At 1 January
2024
represented1
$m
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Intangible assets
|
10
|
8,917
|
8,899
|
8,970
|
|
Property, plant and equipment
|
|
445
|
628
|
636
|
|
Right-of-use assets
|
|
576
|
577
|
576
|
|
Investments in associated undertakings
|
|
41
|
46
|
56
|
|
Other investments
|
|
25
|
26
|
27
|
|
Deferred tax assets
|
|
55
|
43
|
55
|
|
Contract costs
|
|
337
|
298
|
285
|
|
Retirement benefit assets
|
|
6
|
4
|
4
|
|
Trade and other receivables
|
|
52
|
71
|
57
|
|
Derivative financial instruments
|
|
121
|
8
|
72
|
|
|
|
10,575
|
10,600
|
10,738
|
|
Current assets
|
|
|
|
|
|
Other investments
|
|
2
|
1
|
1
|
|
Inventories
|
|
308
|
287
|
264
|
|
Trade and other receivables
|
|
1,151
|
1,137
|
1,121
|
|
Current tax assets
|
|
18
|
28
|
42
|
|
Derivative financial instruments
|
|
61
|
-
|
18
|
|
Cash and cash equivalents
|
|
2,319
|
1,158
|
1,989
|
|
|
|
3,859
|
2,611
|
3,435
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
(1,392)
|
(1,400)
|
(1,457)
|
|
Current tax liabilities
|
|
(61)
|
(53)
|
(61)
|
|
Provisions for liabilities and charges
|
14
|
(275)
|
(144)
|
(119)
|
|
Bank and other short-term borrowings
|
|
(1,411)
|
(1,460)
|
(1,444)
|
|
Lease liabilities
|
|
(171)
|
(163)
|
(162)
|
|
Derivative financial instruments
|
|
(5)
|
(4)
|
(41)
|
|
|
|
(3,315)
|
(3,224)
|
(3,284)
|
|
Net current assets/(liabilities)
|
|
544
|
(613)
|
151
|
|
Non-current liabilities
|
|
|
|
|
|
Other payables
|
|
(46)
|
(86)
|
(90)
|
|
Bank and other long-term borrowings
|
|
(4,156)
|
(3,127)
|
(4,016)
|
|
Lease liabilities
|
|
(392)
|
(394)
|
(405)
|
|
Deferred tax liabilities
|
|
(589)
|
(638)
|
(659)
|
|
Retirement benefit obligations
|
|
(27)
|
(32)
|
(36)
|
|
Provisions for liabilities and charges
|
14
|
(397)
|
(381)
|
(455)
|
|
Derivative financial instruments
|
|
(18)
|
(36)
|
(20)
|
|
|
|
(5,625)
|
(4,694)
|
(5,681)
|
|
Net assets
|
|
5,494
|
5,293
|
5,208
|
|
Equity
|
|
|
|
|
|
Capital and reserves attributable to the Company's equity
holders
|
|
|
|
|
|
Share capital
|
15
|
41
|
41
|
41
|
|
Share premium
|
|
21
|
20
|
19
|
|
Other reserves
|
|
(946)
|
(932)
|
(903)
|
|
Retained earnings
|
|
6,380
|
6,166
|
6,053
|
|
|
|
5,496
|
5,295
|
5,210
|
|
Non-controlling interests
|
|
(2)
|
(2)
|
(2)
|
|
Total equity
|
|
5,494
|
5,293
|
5,208
|
1. Refer to foreign currency translation in material accounting
policies section.
Consolidated Statement of Changes in Equity
For the year ended 31 December
|
|
|
Attributable to equity holders of the Company
|
|
|
|||
|
|
Notes
|
Share
capital
$m
|
Share
premium
$m
|
Other
reserves
$m
|
Retained
earnings
$m
|
Non-controlling
interests
$m
|
Total
equity
$m
|
|
At 1 January 2023 represented2
|
|
41
|
14
|
(883)
|
5,787
|
(2)
|
4,957
|
|
Profit for the year
|
|
-
|
-
|
-
|
474
|
-
|
474
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
|
-
|
-
|
(172)
|
-
|
-
|
(172)
|
|
Net gain on net investment hedge
|
|
-
|
-
|
136
|
-
|
-
|
136
|
|
Net gain on cash flow hedge1
|
|
-
|
-
|
4
|
-
|
-
|
4
|
|
Cost of hedging
|
|
-
|
-
|
12
|
-
|
-
|
12
|
|
Tax related to items taken directly to other
comprehensive income
|
|
-
|
-
|
-
|
7
|
-
|
7
|
|
Total other comprehensive income for the year
|
|
-
|
-
|
(20)
|
481
|
-
|
461
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
Gain on stock options
|
|
-
|
5
|
-
|
-
|
-
|
5
|
|
Dividends paid to equity shareholders
|
7
|
-
|
-
|
-
|
(252)
|
-
|
(252)
|
|
Cost of equity-settled share-based payment plans
|
|
-
|
-
|
-
|
32
|
-
|
32
|
|
Movement in the carrying value of put options
|
|
-
|
-
|
-
|
5
|
-
|
5
|
|
At 31 December 2023 represented2
|
|
41
|
19
|
(903)
|
6,053
|
(2)
|
5,208
|
|
Profit for the year
|
|
-
|
-
|
-
|
392
|
-
|
392
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
|
-
|
-
|
(35)
|
-
|
-
|
(35)
|
|
Net loss on net investment hedge
|
|
-
|
-
|
(22)
|
-
|
-
|
(22)
|
|
Net gain on cash flow hedge1
|
|
-
|
-
|
35
|
-
|
-
|
35
|
|
Cost of hedging
|
|
-
|
-
|
(7)
|
-
|
-
|
(7)
|
|
Tax related to items taken directly to other
comprehensive income
|
|
-
|
-
|
-
|
(8)
|
-
|
(8)
|
|
Total other comprehensive income for the year
|
|
-
|
-
|
(29)
|
384
|
-
|
355
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
Gain on stock options
|
|
-
|
1
|
-
|
-
|
-
|
1
|
|
Dividends paid to equity shareholders
|
7
|
-
|
-
|
-
|
(292)
|
-
|
(292)
|
|
Cost of equity-settled share-based payment plans
|
|
-
|
-
|
-
|
25
|
-
|
25
|
|
Tax related to items taken directly to equity
|
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
|
Movement in the carrying value of put options
|
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
|
At 31 December 2024
represented2
|
|
41
|
20
|
(932)
|
6,166
|
(2)
|
5,293
|
|
Profit for the year
|
|
-
|
-
|
-
|
470
|
-
|
470
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
Remeasurement of net defined benefit liability
|
|
|
|
|
1
|
|
1
|
|
Net exchange adjustments offset in reserves
|
|
-
|
-
|
(139)
|
-
|
-
|
(139)
|
|
Net gain on net investment hedge
|
|
-
|
-
|
129
|
-
|
-
|
129
|
|
Net loss on cash flow hedge1
|
|
-
|
-
|
(31)
|
-
|
-
|
(31)
|
|
Cost of hedging
|
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Tax related to items taken directly to other
comprehensive income
|
|
-
|
-
|
-
|
18
|
-
|
18
|
|
Cumulative reserves recycled to income statement on disposal of
foreign operations
|
|
-
|
-
|
27
|
-
|
-
|
27
|
|
Total other comprehensive income for the year
|
|
-
|
-
|
(14)
|
489
|
-
|
475
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
Gain on stock options
|
|
-
|
1
|
-
|
-
|
-
|
1
|
|
Dividends paid to equity shareholders
|
7
|
-
|
-
|
-
|
(304)
|
-
|
(304)
|
|
Cost of equity-settled share-based payment plans
|
|
-
|
-
|
-
|
28
|
-
|
28
|
|
Tax related to items taken directly to equity
|
|
-
|
-
|
-
|
1
|
-
|
1
|
|
At 31 December 2025
|
|
41
|
21
|
(946)
|
6,380
|
(2)
|
5,494
|
1. $31m net loss (2024: $35m net gain; 2023: $4m net gain) on cash
flow hedge includes a $64m gain (2024: $65m loss; 2023: $36m loss)
from the effective portion of changes in fair value, and a $95m
loss (2024: $100m gain; 2023: $40m gain) reclassification to the
income statement due to changes in foreign exchange
rates.
2. Refer to foreign currency translation in material accounting
policies section.
Shares of $nil (2024: $nil; 2023: $nil) have been netted against
retained earnings. This represents 9.8m (2024: 11.4m; 2023: 13.0m)
shares held by the Rentokil Initial Employee Share Trust, which is
not consolidated. The market value of these shares at 31 December
2025 was $59m(2024: $56m; 2023: $71m). Dividend income from, and
voting rights on, the shares held by the Trust have been
waived.
Consolidated Statement of Changes in Equity
(continued)
Analysis of other reserves
|
|
Capital
reduction
reserve
$m
|
Merger
relief
reserve
$m
|
Cash flow
hedge
reserve
$m
|
Translation
reserve
$m
|
Cost of
hedging
$m
|
Total
$m
|
|
At 1 January 2023 represented2
|
(3,146)
|
3,326
|
4
|
(1,062)
|
(5)
|
(883)
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
(172)
|
-
|
(172)
|
|
Net gain on net investment hedge
|
-
|
-
|
-
|
136
|
-
|
136
|
|
Net gain on cash flow hedge1
|
-
|
-
|
4
|
-
|
-
|
4
|
|
Cost of hedging
|
-
|
-
|
-
|
-
|
12
|
12
|
|
Total comprehensive income for the year
|
-
|
-
|
4
|
(36)
|
12
|
(20)
|
|
At 31 December 2023 represented2
|
(3,146)
|
3,326
|
8
|
(1,098)
|
7
|
(903)
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
(35)
|
-
|
(35)
|
|
Net loss on net investment hedge
|
-
|
-
|
-
|
(22)
|
-
|
(22)
|
|
Net gain on cash flow hedge1
|
-
|
-
|
35
|
-
|
-
|
35
|
|
Cost of hedging
|
-
|
-
|
-
|
-
|
(7)
|
(7)
|
|
Total comprehensive income for the year
|
-
|
-
|
35
|
(57)
|
(7)
|
(29)
|
|
At 31 December 2024
represented2
|
(3,146)
|
3,326
|
43
|
(1,155)
|
-
|
(932)
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
(139)
|
-
|
(139)
|
|
Net gain on net investment hedge
|
-
|
-
|
-
|
129
|
-
|
129
|
|
Net loss on cash flow hedge1
|
-
|
-
|
(31)
|
-
|
-
|
(31)
|
|
Cumulative reserves recycled to income statement on disposal of
foreign operations
|
-
|
-
|
-
|
27
|
-
|
27
|
|
Total comprehensive income for the year
|
-
|
-
|
(31)
|
17
|
-
|
(14)
|
|
At 31 December 2025
|
(3,146)
|
3,326
|
12
|
(1,138)
|
-
|
(946)
|
1. $31m net loss (2024: $35m net gain; 2023: $4m net gain) on cash
flow hedge includes a $64m gain (2024: $65m loss; 2023: $36m loss)
from the effective portion of changes in fair value, offset by
reclassification to the cost of acquisition of $nil (2024: $nil;
2023: $nil) and a $95m loss (2024: $100m gain; 2023: $40m gain)
reclassification to the income statement due to changes in foreign
exchange rates.
2. Refer to foreign currency translation in material accounting
policies section.
The capital reduction reserve arose in 2005 as a result of the
scheme of arrangement of Rentokil Initial 1927 plc, under section
425 of the Companies Act 1985, to introduce a new holding company,
Rentokil Initial plc, and the subsequent reduction in capital
approved by the High Court whereby the nominal value of each
ordinary share was reduced from 100p to 1p.
The excess of the fair value of shares issued to fund the
acquisition of Terminix over their par value gave rise to a new
reserve called a Merger Relief Reserve. Under section 612 of the
Companies Act 2006, merger relief is available if certain
circumstances are met when a business is acquired by issuing shares
to replace already issued shares. This reserve is unrealised (and
therefore not distributable), but it may become realised at a later
date; for example, on disposal of the investment to which it
relates or on impairment of that investment (which may occur
after payment of a dividend by the investment).
Consolidated Cash Flow Statement
For the year ended 31 December
|
|
Note
|
2025
$m
|
2024
represented2
$m
|
2023
represented2
$m
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Operating profit from:
|
|
|
|
|
|
|
|
-
Continuing operations
|
|
584
|
644
|
727
|
|
|
-
Discontinued operations
|
8
|
74
|
57
|
50
|
|
Operating profit including discontinued operations
|
|
658
|
701
|
777
|
|
|
Adjustments for:
|
|
|
|
|
|
|
|
-
Depreciation and impairment of property, plant and
equipment
|
|
167
|
204
|
191
|
|
|
-
Depreciation and impairment of leased assets
|
|
160
|
157
|
150
|
|
|
-
Amortisation and impairment of intangible assets (excluding
computer software)
|
10
|
199
|
254
|
218
|
|
|
-
Amortisation and impairment of computer software
|
10
|
37
|
33
|
32
|
|
|
-
Other non-cash items
|
|
15
|
23
|
32
|
|
|
Changes
in working capital (excluding the effects of acquisitions and
exchange differences on consolidation):
|
|
|
|
|
|
- Inventories
|
|
(27)
|
(15)
|
(18)
|
|
|
|
-
Contract costs
|
|
(51)
|
(18)
|
(24)
|
|
|
-
Trade and other receivables
|
|
(20)
|
(48)
|
(36)
|
|
|
-
Trade and other payables and provisions
|
|
162
|
(129)
|
(76)
|
|
|
Interest
received
|
|
31
|
46
|
31
|
|
Interest paid1
|
|
(255)
|
(229)
|
(237)
|
|
|
Income tax paid
|
|
(104)
|
(111)
|
(124)
|
|
|
Net cash flows from operating activities
|
|
972
|
868
|
916
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
(208)
|
(219)
|
(207)
|
|
|
Purchase of intangible fixed assets
|
|
(61)
|
(56)
|
(55)
|
|
|
Proceeds from sale of property, plant and equipment
|
|
20
|
5
|
17
|
|
|
Acquisition of companies and businesses, net of cash
acquired
|
9
|
(121)
|
(219)
|
(298)
|
|
|
Disposal of investment in associate
|
|
-
|
-
|
24
|
|
|
Proceeds from disposal of businesses, net of tax paid
|
8
|
391
|
-
|
-
|
|
|
Dividends received from associates
|
|
5
|
14
|
5
|
|
|
Net change to cash flow from investment in term
deposits
|
|
-
|
(1)
|
-
|
|
|
Net cash flows from investing activities
|
|
26
|
(476)
|
(514)
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Dividends paid to equity shareholders
|
7
|
(304)
|
(292)
|
(252)
|
|
|
Capital element of lease payments
|
|
(192)
|
(185)
|
(195)
|
|
|
Cash outflow on settlement of debt-related foreign exchange forward
contracts
|
|
(9)
|
(11)
|
(4)
|
|
|
Proceeds from new debt
|
|
1,232
|
-
|
-
|
|
|
Debt repayments
|
11
|
(700)
|
(464)
|
-
|
|
|
Net cash flows from financing activities
|
11
|
27
|
(952)
|
(451)
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
1,025
|
(560)
|
(49)
|
|
|
Cash and cash equivalents at beginning of period
|
|
467
|
1,062
|
1,064
|
|
|
Exchange gain/(loss) on cash and cash equivalents
|
|
97
|
(35)
|
47
|
|
|
Cash and cash equivalents at end of the financial
period
|
11
|
1,589
|
467
|
1,062
|
|
1. Interest paid includes the interest element of lease payments of
$31m (2024: $31m; 2023: $31m).
2. Refer to foreign currency translation in material accounting
policies section.
Notes to the Consolidated Financial Statements
1. Basis of preparation and accounting policies
a) Basis of preparation
The Consolidated Financial Statements have been prepared in
accordance with UK-adopted International Accounting Standards (IAS)
and with the requirements of the Companies Act 2006 as applicable
to companies reporting under those standards. The Consolidated
Financial Statements also comply fully with International Financial
Reporting Standards (IFRSs) as issued by the International
Accounting Standards Board (IASB). The Consolidated Financial
Statements have been prepared under the historical cost convention,
as modified by the revaluation of certain financial assets and
liabilities (including derivative instruments). Certain financial
and equity instruments have been measured at fair
value.
b) Going concern
The Directors have prepared Board-approved cash flow forecasts for
a period of 18 months to 30 June 2027 to demonstrate that the Group
has sufficient liquidity to meet its obligations as they fall due
for the period of at least 12 months from the date of approval of
these Consolidated Financial Statements, with a longer assessment
period to 30 June 2027 being considered as
appropriate.
Additionally, the Directors have assessed severe but plausible
downside scenarios. The downside scenarios include: (i) a revenue
decline of 20% against base budget for six months; and (ii) a 20%
revenue decline for 12 months. Both of these scenarios are
considerably worse than the actual impact of the COVID-19 pandemic
in 2020. These assessments were prepared on the conservative
assumption that the Group has no access to the debt capital
markets. As part of their analysis, the Board considered mitigating
actions at their discretion to improve the position identified by
the analysis if the debt capital markets are not accessible,
such as cost savings, adjusting the level of M&A activity,
and/or dividends paid. In addition to the above, the Directors also
considered that the Group has the ability to extend existing or
raise new financing, although this was not included in the
modelling undertaken for going concern assessment.
The Going Concern analysis demonstrates that under the base case,
the Group has c.$0.8bn of headroom at 30 June 2027 and c.$0.5bn
under the severe but plausible downside scenario. This is before
potential mitigations available, estimated to be
c.$1.2bn.
Based on the above, the Directors have concluded that the Group is
well placed to manage its financing and other business risks and
have a reasonable expectation that the Group will have adequate
resources to continue in operation for at least 12 months from the
signing date of these Consolidated Financial Statements. They
therefore consider it appropriate to adopt the going concern
basis in preparing these Consolidated Financial
Statements.
c) Foreign currency translation
Items included in the Financial Statements of each of the Group's
entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency).
The Consolidated Financial Statements are presented in US dollars,
which differs from the functional currency of Rentokil Initial plc
which remains in sterling.
On 25 July 2024, the Group announced that with effect from 1
January 2025 it would be changing its presentation currency from
sterling to US dollar. Within the Group's current portfolio of
businesses, sterling denominated earnings, while sizeable, are a
relatively small proportion of overall earnings. To reduce the
potential for foreign exchange volatility in our future reported
earnings, the Board determined that, with effect from 1 January
2025, the Group will present its results in US dollar.
Accordingly, to satisfy the requirements of IAS 21 The Effects of
Changes in Foreign Exchange Rates, the reported results for the
years ended 31 December 2024 and 31 December 2023 have been
translated from sterling to US dollar using the following
procedures:
(i) assets and liabilities denominated in non-US dollar currencies
were translated into US dollar at the relevant closing rates of
exchange;
(ii) the trading results of subsidiaries whose functional currency
was other than US dollar were translated into US dollar at the
average rates of exchange for the relevant period, with material
items translated at the rate on the dates of
transaction;
(iii) share capital, share premium, capital reduction reserve, and
merger relief reserve were translated at the historic rates
prevailing on the date of each transaction; and
(iv) the cumulative translation reserve balance was set to nil on 1
January 2004, the date of transition to IFRS, and has been
represented on the basis that the Group has reported in US dollar
since that date.
A change in presentation currency represents a change in accounting
policy under IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors which is accounted for retrospectively. The
£/$ rates used for this exercise are: average 2024 1.2773,
2023 1.2441; and closing 2024 1.2519, 2023 1.2737.
d) Standards, amendments, and interpretations to published
standards that are mandatorily effective for the current
year
Except as described below, the accounting policies applied in these
Consolidated Financial Statements are the same as those applied in
the Group's Consolidated Financial Statements for the year ended
31 December 2024.
The Group has adopted the following new standards and amendments to
standards, including any consequential amendments to other
standards, with effect from 1 January 2025:
|
●
|
amendments to IAS 21 - Lack of exchangeability
|
The application of this amendment had no material impact
on the disclosures of the amounts recognised in the Group's
Consolidated Financial Statements. Consequently, no adjustment
has been made to the comparative financial information at
31 December 2024.
e) New standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been
published that are not mandatory for 31 December 2025 reporting
periods, and have not been adopted early by the Group.
|
●
|
IFRS 18 - Presentation and disclosure in financial
statements
|
IFRS 18 is effective for annual periods beginning on or after 1
January 2027 and will replace IAS 1 - Presentation of financial
statements. It will introduce new requirements that are intended to
help to achieve comparability of the financial performance of
similar entities, and provide more relevant information and
transparency to users. Even though IFRS 18 will not impact the
recognition or measurement of items in the financial statements,
its impacts on presentation and disclosure are expected to be
pervasive; in particular those related to the statement of
comprehensive income or loss, and providing management-defined
performance measures within the financial statements.
IFRS 7 & IFRS 9 is effective for annual periods beginning on or
after 1 January 2026. Restatement is required under IAS 8 otherwise
the cumulative effect is recognised in the opening balance of
retained earnings and other equity components at the date of
application. The amendments clarify IFRS 9 rules for derecognition,
SPPI assessment (including ESG-linked features), and the treatment of renewable
PPAs, while IFRS 7 introduces stronger disclosure requirements for
contingent and ESG-linked terms to improve
transparency.
Management is currently assessing the detailed implications of
applying the new standard on the Group's consolidated financial
statements.
2. Revenue recognition and operating segments
Segment reporting
Segmental information has been presented in accordance with IFRS 8
Operating Segments on the next page. The Group's operating segments
are regions and this reflects the internal management reporting
structures and the way information is reviewed by the chief
operating decision maker (the Chief Executive). The businesses
within each operating segment operate in a number of different
countries and sell services across two business segments with the
workwear segment disposed of in the year.
Following the acquisition of Terminix, the majority of the Group's
activity is in North America. With effect from 1 January 2025, the
Group's reporting structure has been changed to combine Europe
incl. LATAM, UK & SSA, Pacific and Asia & MENAT regions
into a single operating and reporting segment, International. The
Chief Executive remains as CODM and reviews the results on a
monthly basis for North America and International segments. All
reporting to the Board is also done on this basis. Comparative
segmental financial information for 2024 and 2023 have been
represented.
Disaggregated revenue under IFRS 15 is the same as the segmental
analysis below. Restructuring costs, one-off and adjusting items,
amortisation and impairment of intangible assets (excluding
computer software), and central and regional costs are presented at
a Group level as they are not targeted or managed at reportable
segment level. The basis of presentation is consistent with the
information reviewed by internal management.
The segment profit or loss measure that is regularly provided to
the CODM is Adjusted Operating Profit.
Revenue and Profit
|
|
Revenue
2025
$m
|
Revenue
2024
$m
|
Revenue
2023
$m
|
Operating
profit
2025
$m
|
Operating
profit
2024
$m
|
Operating
profit
2023
$m
|
|
|
North America
|
|
|
|
|
|
|
|
|
|
Pest
Control
|
4,148
|
4,026
|
3,981
|
720
|
688
|
745
|
|
|
Hygiene
& Wellbeing
|
146
|
138
|
131
|
29
|
25
|
23
|
|
Sub-total North America
|
4,294
|
4,164
|
4,112
|
749
|
713
|
768
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
|
|
|
|
|
|
|
Pest
Control
|
1,555
|
1,455
|
1,355
|
323
|
299
|
286
|
|
|
Hygiene
& Wellbeing
|
1,059
|
998
|
918
|
195
|
180
|
169
|
|
Sub-total International
|
2,614
|
2,453
|
2,273
|
518
|
479
|
455
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
6,908
|
6,617
|
6,385
|
1,267
|
1,192
|
1,223
|
|
|
|
|
|
|
|
|
|
|
|
Central and regional overheads
|
-
|
-
|
-
|
(191)
|
(175)
|
(150)
|
|
|
Restructuring costs
|
-
|
-
|
-
|
(6)
|
(9)
|
(9)
|
|
|
Revenue and Adjusted Operating Profit
|
6,908
|
6,617
|
6,385
|
1,070
|
1,008
|
1,064
|
|
|
One-off and adjusting items
|
|
|
|
(287)
|
(110)
|
(119)
|
|
|
Amortisation and impairment of intangible assets1
|
|
|
|
(199)
|
(254)
|
(218)
|
|
|
Operating profit
|
|
|
|
584
|
644
|
727
|
|
|
Finance income
|
|
|
|
46
|
59
|
60
|
|
|
Finance cost
|
|
|
|
(250)
|
(250)
|
(232)
|
|
|
Share of profit from associates net of tax
|
|
|
|
10
|
9
|
11
|
|
|
Profit before income tax
|
|
|
|
390
|
462
|
566
|
|
1. Excluding computer software, which is included in our segment
operating profit measure.
Analysis of revenue by type
|
|
Revenue
2025
$m
|
Revenue
2024
$m
|
Revenue
2023
$m
|
|
Contract service revenue
|
4,803
|
4,643
|
4,489
|
|
Job work
|
1,549
|
1,472
|
1,365
|
|
Sales of goods
|
556
|
502
|
531
|
|
Total
|
6,908
|
6,617
|
6,385
|
Other segment items included in the consolidated income statement
are as follows:
|
|
Depreciation, amortisation and impairment
2025
$m
|
Net impairment losses on financial assets
2025
$m
|
Depreciation, amortisation and impairment
2024
$m
|
Net impairment losses on financial assets
2024
$m
|
Depreciation, amortisation and impairment
2023
$m
|
Net impairment losses on financial assets
2023
$m
|
|
North America
|
256
|
66
|
269
|
62
|
270
|
43
|
|
International
|
238
|
8
|
263
|
9
|
218
|
6
|
|
Central and regional
|
34
|
-
|
33
|
-
|
28
|
-
|
|
Total
|
528
|
74
|
565
|
71
|
516
|
49
|
3. Finance cost
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Hedged interest payable on medium-term notes
issued1
|
127
|
77
|
76
|
|
Interest payable on bank loans and overdrafts1
|
27
|
64
|
50
|
|
Interest payable on RCF1
|
2
|
1
|
4
|
|
Interest payable on foreign exchange swaps2
|
50
|
56
|
54
|
|
Interest payable on leases
|
31
|
31
|
30
|
|
Amortisation of discount on provisions
|
13
|
14
|
18
|
|
Foreign exchange loss on translation of foreign
assets/liabilities
|
-
|
7
|
-
|
|
Total finance cost
|
250
|
250
|
232
|
1. Interest expense on financial liabilities held at amortised
cost.
2. Interest payable on foreign exchange swaps including coupon
interest payable for the year was $56m (2024: $69m). $6m has been
reported in other comprehensive income due to hedge accounting
(2024: $13m).
4. Finance income
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Bank interest received
|
31
|
46
|
31
|
|
Fair value gain on hedge ineffectiveness
|
2
|
4
|
3
|
|
Foreign exchange gain on translation of foreign
assets/liabilities
|
10
|
-
|
12
|
|
Hyperinflation accounting adjustment
|
3
|
9
|
14
|
|
Total finance income
|
46
|
59
|
60
|
5. Income tax
Analysis of charge in the year:
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Current tax charge
|
119
|
110
|
114
|
|
Adjustment in respect of previous periods
|
(5)
|
6
|
(11)
|
|
Total current tax
|
114
|
116
|
103
|
|
Deferred tax (credit)/charge
|
(14)
|
9
|
31
|
|
Deferred tax adjustment in respect of previous periods
|
-
|
(9)
|
(5)
|
|
Total deferred tax
|
(14)
|
-
|
26
|
|
Continuing tax charge
|
100
|
116
|
129
|
|
Discontinued income tax charge
|
16
|
9
|
11
|
|
Total tax charge
|
116
|
125
|
140
|
The income tax charge for the period at actual exchange rates was
$100m on the reported profit before tax of $390m, giving an
effective tax rate (ETR) of 25.6% (2024: 25.1%; 2023: 22.8%). The
Group's ETR before amortisation of intangible assets (excluding
computer software), one-off and adjusting items and the net
interest adjustments for 2025 was 25.3% (2024: 24.2%; 2023: 23.8%).
Adjusted ETR is higher this year compared to last year due to a
larger deferred tax asset recognised on losses in 2024. This
compares with a blended rate of tax for the countries in which the
Group operates of 25.3% (2024: 25.3%; 2023: 25.1%).
The cash tax paid for the year was $104m (2024: $111m). The
decrease was attributable mainly to one-off US tax deductions
resulting from the One Big Beautiful Bill Act enacted on 4 July
2025.
|
|
2025
$m
|
2024
$m
|
|
Deferred Tax at 1 January
|
(595)
|
(604)
|
|
Exchange differences
|
(7)
|
1
|
|
Impact of business combinations & disposals
|
43
|
25
|
|
Credited/(Charged) to the income statement
|
6
|
(5)
|
|
Credited/(Charged) to other comprehensive income
|
18
|
(8)
|
|
Credited/(Charged) to equity
|
1
|
(4)
|
|
Deferred Tax at 31 December
|
(534)
|
(595)
|
A deferred tax asset of $56m has been recognised in respect of
losses which are expected to be utilised within 10 years (2024:
$51m), of which $41m (2024: $38m) relates to UK losses (excluding
capital losses) carried forward at 31 December 2025 (both amounts
having increased due to foreign exchange translation by $3m during
the year). These amounts have been calculated by estimating the
future taxable profits, against which the tax losses will be
utilised, progressively risk-weighted, and applying the tax rates
(substantively enacted as at the balance sheet date) applicable for
each year.
The UK continues to apply a global minimum effective tax rate of
15% for 2025. The legislation implements a domestic top-up tax and
a multinational top-up tax, however, the group does not expect a
material top up tax each year (less than $1m).
6. Earnings per share
Basic earnings per share is calculated by dividing the profit after
tax attributable to equity holders of the Company by the weighted
average number of shares in issue during the year, excluding those
held in the Rentokil Initial Employee Share Trust (see note at the
bottom of the Consolidated Statement of Changes in Equity) which
are treated as cancelled, and including share options for which all
conditions have been met.
For diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to include all potential
dilutive ordinary shares. The Group's potentially dilutive ordinary
shares relate to the contingent issuable shares under the Group's
long-term incentive plans (LTIPs) to the extent that the
performance conditions have been met at the end of the period.
These share options are issued for nil consideration
to employees if performance conditions are met.
For the calculation of diluted earnings per share, 477,325 share
options were anti-dilutive and not included in the calculation of
the dilutive effect as at 31 December 2025 (2024: 435,578; 2023:
18,422).
Details of the calculation of earnings per share are set out
below:
|
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Profit attributable to equity holders of the Company from
continuing operations
|
|
290
|
346
|
437
|
|
Profit attributable to equity holders of the Company from
discontinued operations
|
|
180
|
46
|
37
|
|
Total profit attributable to equity holders of the
Company
|
|
470
|
392
|
474
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares in issue
(million)
|
|
2,524
|
2,521
|
2,516
|
|
Adjustment for potentially dilutive shares (million)
|
|
11
|
7
|
11
|
|
Weighted average number of ordinary shares for diluted earnings per
share (million)
|
|
2,535
|
2,528
|
2,527
|
|
|
|
|
|
|
|
Earnings per share for continuing operations
|
|
|
|
|
|
Basic earnings per share (cents)
|
|
11.49
|
13.72
|
17.37
|
|
Diluted earnings per share (cents)
|
|
11.44
|
13.69
|
17.29
|
|
|
|
|
|
|
|
Earnings per share for discontinued operations
|
|
|
|
|
|
Basic earnings per share (cents)
|
|
7.13
|
1.82
|
1.47
|
|
Diluted earnings per share (cents)
|
|
7.10
|
1.82
|
1.46
|
|
|
|
|
|
|
|
Total earnings per share
|
|
|
|
|
|
Basic earnings per share (cents)
|
|
18.62
|
15.54
|
18.84
|
|
Diluted earnings per share (cents)
|
|
18.54
|
15.51
|
18.75
|
7. Dividends
Dividend distribution to the Company's shareholders is recognised
as a liability in the Consolidated Financial Statements in the
period in which the dividends are approved by the Company's
shareholders. Interim dividends are recognised when
paid.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
2022 final dividend paid - 6.50 cents per
share 1
|
-
|
-
|
165
|
|
2023 interim dividend paid - 3.44 cents per
share 2
|
-
|
-
|
87
|
|
2023 final dividend paid - 7.41 cents per
share 1
|
-
|
186
|
-
|
|
2024 interim dividend paid - 4.15 cents per
share 2
|
-
|
106
|
-
|
|
2024 final dividend paid - 7.91 cents per
share 1
|
198
|
-
|
-
|
|
2025 interim dividend paid - 4.15 cents per share
|
106
|
-
|
-
|
|
|
304
|
292
|
252
|
1. Represented at exchange rate prevailing at AGM's date (2024:
5.93 pence per share; 2023: 5.93 pence per share)
2. Represented at exchange rate prevailing at date of announcement
(2024: 3.16 pence per share; 2023: 2.75 pence per
share)
An interim dividend of 4.15 cents per share was paid on 22
September 2025, amounting to $106m. A final dividend in respect of
2025 of 8.24 cents per share is to be proposed at the Annual
General Meeting on 7 May 2026.
The aggregate amount of the proposed dividend to be paid out of
retained earnings at 31 December 2025, but not recognised as a
liability at year end, is $208m (2024: $198m; 2023:
$186m).
8. Discontinued operations
Rentokil Initial plc announced that it entered into an agreement
for the intended sale of its Workwear business in France with
H.I.G. Capital (the Proposed Transaction) on 28 May 2025 which was
subsequently completed on 30 September 2025. Financial information
relating to the discontinued operation to the date of disposal is
set out below.
The financial performance and cash flow information presented below
are for the nine months ended 30 September 2025, the year ended 31
December 2024, and the year ended 31 December 2023.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Revenue
|
261
|
324
|
302
|
|
Operating expenses
|
(186)
|
(266)
|
(252)
|
|
Net impairment losses on financial assets
|
(1)
|
(1)
|
-
|
|
Operating profit
|
74
|
57
|
50
|
|
Finance cost
|
(2)
|
(2)
|
(2)
|
|
Profit before income tax
|
72
|
55
|
48
|
|
Income tax expense
|
(16)
|
(9)
|
(11)
|
|
Profit after income tax of discontinued operations
|
56
|
46
|
37
|
|
Profit on sale of the subsidiary after income tax
|
124
|
-
|
-
|
|
Profit from discontinued operations
|
180
|
46
|
37
|
|
Profit for the period attributable to:
|
|
|
|
|
Equity holders of the Company
|
180
|
46
|
37
|
|
Other comprehensive income:
|
|
|
|
|
Items that may be reclassified subsequently to the income
statement:
|
|
|
|
|
Net exchange adjustments offset in reserves
|
38
|
(12)
|
7
|
|
Net (loss)/gain on net investment hedge
|
(11)
|
8
|
(5)
|
|
Other comprehensive income for the period
|
27
|
(4)
|
2
|
|
Total comprehensive income for the period
|
207
|
42
|
39
|
|
Total comprehensive income for the period attributable
to:
|
|
|
|
|
Equity holders of the Company
|
207
|
42
|
39
|
|
Net cash generated from operating activities
|
100
|
125
|
114
|
|
Net cash flows from investing activities
|
318
|
(85)
|
(85)
|
|
Net cash flows from financing activities
|
(6)
|
(8)
|
(7)
|
|
Net increase in cash generated by discontinued
operations
|
412
|
32
|
22
|
The carrying amounts of assets and liabilities as at the date of
sale were:
|
|
At 30
September
2025
$m
|
|
Assets
|
|
|
Intangible assets
|
8
|
|
Property, plant and equipment
|
287
|
|
Right-of-use assets
|
22
|
|
Contract costs
|
20
|
|
Inventories
|
12
|
|
Trade and other receivables
|
82
|
|
Cash and cash equivalents
|
6
|
|
|
437
|
|
Liabilities
|
|
|
Trade and other payables
|
(112)
|
|
Lease liabilities
|
(20)
|
|
Deferred and current tax
|
(56)
|
|
Retirement benefit obligations
|
(8)
|
|
Provisions
|
(9)
|
|
|
(205)
|
|
Net assets and liabilities disposed
|
232
|
|
Cash consideration received
|
397
|
|
Carrying amount of net assets sold
|
(232)
|
|
Gain on sale before income tax and reclassification of foreign
currency translation reserve
|
165
|
|
Cumulative exchange recycled from translation reserve
|
(38)
|
|
Cumulative reserve recycled from net investment hedge
reserve
|
11
|
|
Costs related to disposal
|
(14)
|
|
Net profit on disposal
|
124
|
9. Business combinations
All business combinations are accounted for using the purchase
method (acquisition accounting) in accordance with IFRS 3 Business
Combinations. The cost of a business combination is the aggregate
of the fair values at the date of exchange of assets given,
liabilities incurred or assumed, and equity instruments issued by
the Group. The cost of a business combination is allocated at the
acquisition date by recognising the acquiree's identifiable assets,
liabilities, and contingent liabilities that satisfy the
recognition criteria at their fair values. Any excess of the
purchase price over the fair value of the identifiable assets and
liabilities is recognised as goodwill. The acquisition date is the
date on which the acquirer effectively obtains control of the
acquiree.
An intangible asset is recognised if it meets the definition under
IAS 38 Intangible Assets. The intangible assets arising on
acquisition are goodwill, customer lists, and brands. Goodwill
represents the synergies, workforce, and other benefits expected as
a result of combining the respective businesses. Customer lists and
brands are recognised at their fair value at the date of
acquisition using an income-based approach, which involves the use
of assumptions including customer termination rates, profit
margins, contributory asset charges, and discount
rates.
At the date of acquisition, deferred and contingent consideration
represents its fair value, with subsequent changes after the
measurement period being recognised in the income statement. Costs
directly attributable to business combinations are charged to the
income statement as incurred and presented as one-off and adjusting
items.
Disclosures required by IFRS 3 Business Combinations are provided
separately for those individual acquisitions that are considered to
be material, and in aggregate for individually immaterial
acquisitions. An acquisition would generally be considered
individually material if the impact on the Group's revenue and
Adjusted Operating Profit measures (on an annualised basis) is
greater than 5%, or the impact on goodwill is greater than 10% of
the closing balance for the period. There were no individually
material acquisitions in the year (2024: none).
During the year, the Group purchased 100% of the share capital or
trade and assets of 36 companies and businesses (2024: 36). The
total consideration in respect of these acquisitions was $115m
(2024: $232m), and the cash outflow from current and past period
acquisitions net of cash acquired was $121m (2024:
$219m).
Goodwill on all acquisitions represents the synergies and other
benefits expected to be realised from integrating acquired
businesses into the Group, such as improved route density,
expansion in use of best-in-class digital tools, and back office
synergies. Details of goodwill and the fair value of net assets
acquired in the year are as follows:
|
|
2025
$m
|
2024
$m
|
|
|
Purchase consideration
|
|
|
|
|
|
-
Cash paid
|
90
|
147
|
|
|
-
Deferred and contingent consideration
|
25
|
85
|
|
Total purchase consideration
|
115
|
232
|
|
|
Provisional fair value of net assets acquired
|
(44)
|
(65)
|
|
|
Goodwill from current-year acquisitions
|
71
|
167
|
|
|
Goodwill expected to be deductible for tax purposes
|
48
|
105
|
|
Deferred consideration of $12m and contingent consideration of $13m
are payable in respect of the above acquisitions (2024: $44m and
$41m respectively). Contingent consideration is payable based on a
variety of conditions, including revenue and profit targets being
met. Amounts for both deferred and contingent consideration are
payable over the next five years. The Group has recognised
contingent and deferred consideration based on fair value at the
acquisition date. A range of outcomes for contingent consideration
payments cannot be estimated due to the variety of performance
conditions and the volume of businesses the Group acquires. During
the year, there were releases of contingent consideration
liabilities not paid of $25m (2024: $9m).
The fair values6 of
assets and liabilities arising from acquisitions in the year are as
follows:
|
|
2025
$m
|
2024
$m
|
|
|
Non-current assets
|
|
|
|
|
|
- Intangible assets1
|
47
|
72
|
|
|
- Property, plant and equipment2
|
4
|
14
|
|
Current assets3
|
9
|
35
|
|
|
Current liabilities4
|
(4)
|
(30)
|
|
|
Non-current liabilities5
|
(12)
|
(26)
|
|
|
Net assets acquired
|
44
|
65
|
|
1. Includes $46m (2024: $59m) of customer lists and $1m (2024:
$13m) of other intangibles.
2. Includes $1m (2024: $5m) of ROU assets.
3. Includes cash acquired of $2m (2024: $3m), inventory of $2m
(2024: $14m), and trade and other receivables of $5m (2024:
$18m).
4. Includes trade and other payables of $4m (2024:
$30m).
5. Includes $8m of deferred tax liabilities relating to acquired
intangibles (2024: $11m), lease liabilities of $1m (2024: $5m), and
other liabilities of $3m (2024: $10m).
6. The fair values of assets and liabilities from acquisitions in
the current year will be finalised in the 2025 Financial
Statements. These fair values are provisional as the acquisition
accounting has not yet been finalised, primarily due to the
proximity of many acquisitions to the year end.
The cash outflow from current and past acquisitions is as
follows:
|
|
2025
$m
|
2024
$m
|
|
Total purchase consideration
|
115
|
232
|
|
Consideration payable in future periods
|
(25)
|
(85)
|
|
Purchase consideration paid in cash
|
90
|
147
|
|
Cash and cash equivalents in acquired companies and
businesses
|
(2)
|
(3)
|
|
Cash outflow on current period acquisitions
|
88
|
144
|
|
Deferred and contingent consideration paid
|
33
|
75
|
|
Cash outflow on current and past acquisitions
|
121
|
219
|
From the dates of acquisition to 31 December 2025, new acquisitions
contributed $29m to revenue and $3m to operating profit (2024: $86m
and $2m respectively).
If the acquisitions had occurred on 1 January 2025, the revenue and
operating profit of the combined Group would have amounted to
$6,943m and $584m respectively (2024: $6,689m and $646m
respectively).
10. Intangible assets
Intangible assets are stated at cost less accumulated amortisation
and accumulated impairment losses, where applicable.
A
breakdown of intangible assets is as shown below:
|
|
Goodwill
$m
|
Customer
lists
$m
|
Indefinite-
lived brands
$m
|
Other
intangibles
$m
|
Product
development
$m
|
Computer
software
$m
|
Total
$m
|
|
Cost
|
|
|
|
|
|
|
|
|
At 1 January 2024
|
6,471
|
1,860
|
1,436
|
97
|
83
|
291
|
10,238
|
|
Exchange differences
|
(51)
|
(48)
|
(2)
|
(1)
|
(1)
|
(7)
|
(110)
|
|
Additions
|
-
|
-
|
-
|
-
|
11
|
59
|
70
|
|
Disposals/retirements
|
-
|
(29)
|
-
|
(3)
|
-
|
(28)
|
(60)
|
|
Acquisition of companies and businesses
|
144
|
47
|
-
|
13
|
-
|
-
|
204
|
|
Hyperinflationary adjustment
|
12
|
5
|
-
|
1
|
-
|
-
|
18
|
|
At 31 December 2024
|
6,576
|
1,835
|
1,434
|
107
|
93
|
315
|
10,360
|
|
At 1 January 2025
|
6,576
|
1,835
|
1,434
|
107
|
93
|
315
|
10,360
|
|
Exchange differences
|
64
|
61
|
1
|
4
|
7
|
19
|
156
|
|
Additions
|
-
|
-
|
-
|
-
|
14
|
47
|
61
|
|
Disposals/retirements
|
(5)
|
(109)
|
-
|
(7)
|
-
|
(29)
|
(150)
|
|
Acquisition of companies and businesses
|
71
|
46
|
-
|
1
|
-
|
-
|
118
|
|
Hyperinflationary adjustment
|
-
|
2
|
-
|
-
|
-
|
-
|
2
|
|
At 31 December 2025
|
6,706
|
1,835
|
1,435
|
105
|
114
|
352
|
10,547
|
|
Accumulated amortisation and impairment
|
|
|
|
|
|
|
|
|
At 1 January 2024
|
(81)
|
(878)
|
-
|
(50)
|
(56)
|
(203)
|
(1,268)
|
|
Exchange differences
|
6
|
35
|
-
|
1
|
2
|
5
|
49
|
|
Disposals/retirements
|
-
|
29
|
-
|
3
|
-
|
26
|
58
|
|
Hyperinflationary adjustment
|
(10)
|
(2)
|
-
|
(1)
|
-
|
-
|
(13)
|
|
Impairment charge
|
(36)
|
-
|
-
|
-
|
(3)
|
-
|
(39)
|
|
Amortisation charge
|
-
|
(194)
|
-
|
(11)
|
(10)
|
(33)
|
(248)
|
|
At 31 December 2024
|
(121)
|
(1,010)
|
-
|
(58)
|
(67)
|
(205)
|
(1,461)
|
|
At 1 January 2025
|
(121)
|
(1,010)
|
-
|
(58)
|
(67)
|
(205)
|
(1,461)
|
|
Exchange differences
|
(1)
|
(49)
|
-
|
(2)
|
(6)
|
(14)
|
(72)
|
|
Disposals/retirements
|
-
|
109
|
-
|
7
|
-
|
25
|
141
|
|
Hyperinflationary adjustment
|
-
|
(2)
|
-
|
-
|
-
|
-
|
(2)
|
|
Amortisation charge
|
-
|
(182)
|
-
|
(7)
|
(10)
|
(37)
|
(236)
|
|
At 31 December 2025
|
(122)
|
(1,134)
|
-
|
(60)
|
(83)
|
(231)
|
(1,630)
|
|
Net book value
|
|
|
|
|
|
|
|
|
At 1 January 2024
|
6,390
|
982
|
1,436
|
47
|
27
|
88
|
8,970
|
|
At 31 December 2024
|
6,455
|
825
|
1,434
|
49
|
26
|
110
|
8,899
|
|
At 31 December 2025
|
6,584
|
701
|
1,435
|
45
|
31
|
121
|
8,917
|
The main categories of intangible assets are as
follows:
Intangible assets - finite useful lives
Intangible assets with finite useful lives are initially measured
at either cost or fair value and amortised on a straight-line basis
over their useful economic lives, which are reviewed on an annual
basis. These assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of the
asset may exceed its recoverable amount. The fair value
attributable to intangible assets acquired through a business
combination is determined by discounting the expected future cash
flows to be generated from that asset at the risk-adjusted weighted
average cost of capital for the Group. The residual values of
intangible assets are assumed to be $nil.
The estimated useful economic lives of intangible assets are as
follows:
|
Customer lists:
|
3 to 15 years
|
|
Other intangibles:
|
2 to 15 years
|
|
Product development:
|
2 to 5 years
|
|
Computer software:
|
3 to 5 years
|
The following are the main categories of intangible assets with
finite useful lives:
(a) Customer lists
Customer lists are acquired as part of business combinations. No
value is attributed to internally generated customer
lists.
(b) Other intangibles
Other intangibles consists of brands with finite useful lives and
intellectual property. Brands are acquired as part of business
combinations. No value is attributed to internally generated
brands as expenditure incurred to develop, maintain, and renew
brands internally is recognised as an expense in the
period incurred. Intellectual property costs are incurred in
acquiring and maintaining patents and licences. These are
recognised only if the cost can be measured reliably, and they are
expected to generate economic benefits beyond one year,
in excess of their cost.
(c) Product development
Costs incurred in the design and testing of new or improved
products are recognised as intangible assets only if the cost can
be measured reliably, and it is probable that the project will be a
success considering its commercial and technological feasibility.
Capitalised product development expenditure is measured at cost
less accumulated amortisation.
Other development expenditure and all research expenditure are
recognised as an expense as incurred and amount to $4m in the year
(2024: $5m).
Development costs recognised as an expense are never reclassified
as an asset in a subsequent period. Development costs that have
been capitalised are amortised from the date the product is made
available.
(d) Computer software
Costs that are directly associated with the production of
identifiable and unique software products that are controlled by
the Group (including employee costs and external software
development costs) are recognised as intangible assets, if they are
expected to generate economic benefits beyond one year in excess of
their cost. Purchased computer software is initially recognised
based on the costs incurred to acquire and bring it into
use.
Costs associated with maintaining computer software are recognised
as an expense in the period in which they are
incurred.
Intangible assets - indefinite useful lives
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group's share of the net identifiable assets
of the acquired business at the date of acquisition. It is
recognised as an intangible asset. Goodwill arising on the
acquisition of an associate is included in investments in
associates.
(b) Brands with indefinite useful lives
Brands with indefinite useful lives are acquired as part of
business combinations. No value is attributed to internally
generated brands as expenditure incurred to develop, maintain, and
renew brands internally is recognised as an expense in the period
incurred.
The Terminix US and Terminix International brands are considered to
have indefinite useful lives due to their long history in the US
(being founded in 1927) and having a strong brand equity in the US
for much of their history and now internationally. The Group plans
to continue to support and invest in the Terminix brand; it
controls all the associated assets that support the underlying
business, and therefore it is considered that there is no
foreseeable limit on the period over which these brands will
continue to generate net cash inflows.
Goodwill and brands with indefinite useful lives are tested
annually for impairment and carried at cost less accumulated
impairment losses. For the purpose of impairment testing,
goodwill is allocated to cash-generating unit groups (CGU groups)
identified according to region of operation and reportable business
unit. Gains and losses on the disposal of an entity include the
carrying amount of goodwill relating to the entity
sold.
At the start of 2025, management reviewed its grouping of CGUs and
its allocation of goodwill for the purposes of assessing impairment
based on the lowest level at which the goodwill is monitored. Based
on this review, management has determined that the Group now has
six CGU groups. These are North America, UK & SSA, Europe,
LATAM, Asia & MENAT and Pacific. The key factors considered in
management's conclusion included the change in reporting segments
to North America and International, to reflect the high proportion
of business in the US, and the subsequent allocation of resources
based on the results for each operating segment.
Before initiating the change in CGU grouping, in accordance with
IAS 36, management performed a value-in-use impairment test on the
pre-existing CGU groups and determined there to be no impairment of
goodwill within any of the groups.
The recoverable amount of a CGU group is determined based on the
higher of value-in-use calculations using cash flow projections,
and fair value less costs to sell. The cash flow projections in
year one are based on financial budgets approved by management,
which are prepared as part of the Group's normal planning process.
Cash flows for years two to five use management's expectation of
revenue growth and operating profit margin, based on past
experience and expectations regarding future performance and
profitability for each CGU group. Cash flows beyond the five-year
period are extrapolated using estimated long-term growth rates
(LTGR).
Cash flow projections included in the impairment review models
include management's view of the impact of climate change,
including costs related to the effects of climate change, as well
as the future costs of the Group's commitment to reach net zero by
2040 and costs of compliance with current legal requirements. The
potential increased costs, to meet these commitments less any
benefits that may occur, are not expected to be material and
therefore have not resulted in any impairments during
2025.
A breakdown of goodwill by region is shown below:
|
|
2025
$m
|
2024
$m
|
|
|
North America
|
5,718
|
5,668
|
|
|
International
|
|
|
|
|
|
Europe
|
250
|
218
|
|
|
UK
& Sub-Saharan Africa
|
149
|
138
|
|
|
Asia
& MENAT
|
232
|
229
|
|
|
LATAM
|
77
|
61
|
|
Pacific
|
158
|
141
|
|
|
Sub-total International
|
866
|
787
|
|
|
Total
|
6,584
|
6,455
|
|
Impairment tests for goodwill and brands with indefinite useful
lives
All CGU groups were supported through the value-in-use approach.
During the year, the Group recognised no goodwill impairments
(2024: $36m). For all goodwill and indefinite-lived brands
balances, it can be demonstrated that there is sufficient headroom
in the recoverable amount of the CGU goodwill balances based on the
assumptions made, and there is no reasonably likely scenario under
which material impairment could be expected to occur in the next 12
months based on the testing performed.
The key assumptions used by CGU groups for value-in-use
calculations were:
|
|
2025 long-term
growth rate1
|
2025 pre-tax
discount rate
|
2024 long-term
growth rate¹
|
2024 pre-tax
discount rate
|
|
|
North America
|
2.2%
|
10.3%
|
2.0-2.1%
|
8.5-8.7%
|
|
|
International
|
|
|
|
|
|
|
|
Europe
|
1.9%
|
9.9%
|
1.7-2.5%
|
8.0-10.8%
|
|
|
UK
& Sub-Saharan Africa
|
2.3%
|
10.9%
|
2.0%
|
9.3-11.1%
|
|
|
Asia
& MENAT
|
2.7%
|
13.1%
|
2.0-4.0%
|
7.7-14.1%
|
|
|
LATAM
|
2.4%
|
12.9%
|
2.3-3.0%
|
11.2-17.11%
|
|
Pacific
|
2.4%
|
10.0%
|
2.0-2.5%
|
10.3-10.9%
|
|
1. Source: imf.org.
The growth rates used by CGU groups are based on the LTGR predicted
for the relevant sector and countries in which a business operates.
They do not exceed the long-term average growth rate for that
industry or countries. The pre-tax discount rates are internally
calculated weighted average cost of capital for each category and
region weighted based on the profit contribution to the region. The
pre-tax discount rates are based on current prices, therefore
future cash flow projections include inflation-linked
measures.
11. Net debt
Net debt is used to assess the Group's financial capacity. Net debt
is not a measure defined by IFRS. Management defines net debt as
the total of bank and other borrowings, lease liabilities,
other investments, fair value of debt-related derivatives, and cash
and cash equivalents (as presented in the Consolidated Balance
Sheet).
Closing net debt comprises:
|
|
2025
$m
|
2024
$m
|
|
Current
|
|
|
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
2,319
|
1,158
|
|
Other investments1
|
2
|
1
|
|
Fair value of debt-related derivatives
|
56
|
(3)
|
|
Bank and other short-term borrowings2
|
(1,411)
|
(1,460)
|
|
Lease liabilities
|
(171)
|
(163)
|
|
Non-current
|
|
|
|
Fair value of debt-related derivatives
|
103
|
(29)
|
|
Bank and other long-term borrowings3
|
(4,156)
|
(3,127)
|
|
Lease liabilities
|
(392)
|
(394)
|
|
Total net debt
|
(3,650)
|
(4,017)
|
1. Net debt excludes other investments which are non-cash, such as
the investment in unlisted shares.
2. Bank and other short-term borrowings consists of $586m bond debt
(2024: $nil), $730m overdraft (2024: $692m), $30m loans (2024:
$720m), and $65m bond accruals (2024: $48m).
3. Bank and other long-term borrowings consists of $4,155m bond
debt (2024: $3,122m) and $1m loans (2024: $5m).
The currency split and cash flows of bank, other borrowings, and
debt-related derivatives are as follows:
|
|
2025
$m
|
2024
$m
|
|
Pound sterling
|
1,265
|
1,153
|
|
Euro
|
1,243
|
1,093
|
|
US dollar
|
2,860
|
2,362
|
|
Other currencies
|
40
|
11
|
|
Carrying value
|
5,408
|
4,619
|
|
Effect of discounting
|
844
|
484
|
|
Undiscounted value
|
6,252
|
5,103
|
|
Analysis of undiscounted cash flows of bank and other
borrowings:
|
|
|
|
Less than one year
|
1,461
|
1,565
|
|
Between one and five years
|
3,573
|
2,314
|
|
More than five years
|
1,218
|
1,224
|
|
Future minimum payments
|
6,252
|
5,103
|
Reconciliation of net change in cash and cash equivalents to net
debt:
|
|
Opening
2025
$m
|
Cash
flows
$m
|
Non-cash
(fair value changes,
accruals and acquisitions)
$m
|
Non-cash
(foreign exchange,additionsand other)
$m
|
Closing
2025
$m
|
|
Bank and other short-term borrowings
|
(1,460)
|
700
|
(65)
|
(586)
|
(1,411)
|
|
Bank and other long-term borrowings
|
(3,127)
|
(1,232)
|
-
|
203
|
(4,156)
|
|
Lease liabilities
|
(557)
|
223
|
(176)
|
(53)
|
(563)
|
|
Other investments
|
1
|
1
|
-
|
-
|
2
|
|
Fair value of debt-related derivatives
|
(32)
|
39
|
(58)
|
210
|
159
|
|
Gross debt
|
(5,175)
|
(269)
|
(299)
|
(226)
|
(5,969)
|
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
1,158
|
1,161
|
-
|
-
|
2,319
|
|
Net debt
|
(4,017)
|
892
|
(299)
|
(226)
|
(3,650)
|
|
|
Opening
2024
$m
|
Cash
flows
$m
|
Non-cash(fair value changes,accruals andacquisitions)
$m
|
Non-cash(foreign exchange,additionsand other)
$m
|
Closing
2024
$m
|
|
Bank and other short-term borrowings
|
(1,444)
|
769
|
(126)
|
(659)
|
(1,460)
|
|
Bank and other long-term borrowings
|
(4,016)
|
-
|
-
|
889
|
(3,127)
|
|
Lease liabilities
|
(567)
|
216
|
(186)
|
(20)
|
(557)
|
|
Other investments
|
1
|
-
|
-
|
(0)
|
1
|
|
Fair value of debt-related derivatives
|
29
|
87
|
(9)
|
(139)
|
(32)
|
|
Gross debt
|
(5,997)
|
1,072
|
(321)
|
71
|
(5,175)
|
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
1,989
|
(814)
|
-
|
(17)
|
1,158
|
|
Net debt
|
(4,008)
|
258
|
(321)
|
54
|
(4,017)
|
Included within the net decrease in cash and cash equivalents is
$9m (2024: $11m) cash paid on debt-related foreign exchange forward
contracts (which is included within financing activities in the
Consolidated Cash Flow Statement).
The total cash inflow in borrowings of $532m (2024: $464m outflow)
includes $1,232m proceeds from new debt (included in financing
activities) (2024:$nil) and $700m debt repayment (included in
financing activities) (2024: $464m).
The derivatives cash outflow of $39m (2024: $85m outflow) includes
$9m (2024: $49m outflow) of cash paid on debt-related foreign
exchange swaps (included in financing activities) and $30m (2024:
$36m) interest paid (included in operating
activities).
The cash outflow of $223m from lease liabilities (2024: $216m)
includes $192m (2024: $185m) capital paid (included within
financing activities) and $31m (2024: $31m) interest paid (included
in operating activities).
Fair value is equal to carrying value for all elements of net debt
with the exception of bond debt which has a carrying value of
$4,748m (2024: $3,122m) and a fair value of $4,814m (2024:
$3,105m).
The Group operates notional pooling arrangements whereby cash
balances and overdrafts held within the same bank have a legal
right of offset. Derivative financial instruments held with the
same bank and having a legal right to offset are shown net. The
following table shows the effect of offsetting in the balance sheet
due to financial instruments subject to enforceable netting
arrangements:
|
|
Gross
amount
2025
$m
|
Gross amounts set off in the
balance sheet
2025
$m
|
Net amounts presented in the balance sheet
2025
$m
|
Amount subject to master netting
arrangement
2025
$m
|
Net amount
2025
$m
|
|
Financial assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
2,319
|
-
|
2,319
|
(730)
|
1,589
|
|
Trade and other receivables1
|
1,119
|
-
|
1,119
|
-
|
1,119
|
|
Other financial assets
|
2
|
-
|
2
|
-
|
2
|
|
Derivative financial instruments
|
182
|
-
|
182
|
(21)
|
161
|
|
Total
|
3,622
|
-
|
3,622
|
(751)
|
2,871
|
|
Financial liabilities
|
|
|
|
|
|
|
Trade and other payables2
|
(1,037)
|
-
|
(1,037)
|
-
|
(1,037)
|
|
Borrowings
|
(5,567)
|
-
|
(5,567)
|
730
|
(4,837)
|
|
Lease liabilities
|
(563)
|
-
|
(563)
|
-
|
(563)
|
|
Derivative financial instruments
|
(23)
|
-
|
(23)
|
21
|
(2)
|
|
Total
|
(7,190)
|
-
|
(7,190)
|
751
|
(6,439)
|
|
|
Gross
amount
2024
$m
|
Gross amounts set off in the
balance sheet
2024
$m
|
Net amounts presented in the balance sheet
2024
$m
|
Amount subject to master netting arrangement
2024
$m
|
Net amount
2024
$m
|
|
Financial assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
1,158
|
-
|
1,158
|
(691)
|
467
|
|
Trade and other receivables1
|
1,112
|
-
|
1,112
|
-
|
1,112
|
|
Other financial assets
|
1
|
-
|
1
|
-
|
1
|
|
Derivative financial instruments
|
8
|
-
|
8
|
(2)
|
6
|
|
Total
|
2,278
|
-
|
2,278
|
(693)
|
1,585
|
|
Financial liabilities
|
|
|
|
|
|
|
Trade and other payables2
|
(1,060)
|
-
|
(1,060)
|
-
|
(1,060)
|
|
Borrowings
|
(4,587)
|
-
|
(4,587)
|
691
|
(3,896)
|
|
Lease liabilities
|
(557)
|
-
|
(557)
|
-
|
(557)
|
|
Derivative financial instruments
|
(40)
|
-
|
(40)
|
2
|
(38)
|
|
Total
|
(6,244)
|
-
|
(6,244)
|
693
|
(5,551)
|
1. Trade and other receivables exclude prepayments of $84m (2024:
$96m)
2. Trade and other payables exclude social security & other
taxes of $109m (2024: $114m) and contract liabilities of $292m
(2024: $312m)
12. Analysis of bank and bond debt
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are classified as current
liabilities unless the Group has a continuing right to defer
settlement of the liability for at least 12 months after the
balance sheet date.
The Group's bank debt facilities comprise:
|
|
Facility amount
2025
$m
|
Drawn at year end
2025
$m
|
Headroom
2025
$m
|
Interest rate at year end
2025
%
|
Facility amount
2024
$m
|
Drawn at year end
2024
$m
|
Headroom
2024
$m
|
Interest rateat year end
2024
%
|
|
Current
|
|
|
|
|
|
|
|
|
|
$700m term Loan due October 2025 (repaid April
2025)
|
-
|
-
|
-
|
-
|
700
|
700
|
-
|
5.18
|
|
$50m term loan due May 2025 (ended April 2025)
|
-
|
-
|
-
|
-
|
50
|
-
|
50
|
0.21
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
$1.0bn RCF due October 2029
|
1,000
|
-
|
1,000
|
0.14
|
1,000
|
-
|
1,000
|
0.14
|
During April 2025, the Group fully repaid the $700m term loan with
proceeds from new bonds (totalling $1.25bn) issued and terminated
the $50m term loan.
The Revolving Credit Facility (RCF) remained undrawn throughout
2024 and 2025. There are no financial covenants associated with the
RCF or any other debt facility.
Medium-term notes and bond debt comprises:
|
|
Bond interest coupon
2025
|
Effective hedged interest rate
2025
|
Bond interest coupon
2024
|
Effective hedged interest rate
2024
|
|
Current
|
|
|
|
|
|
€500m bond due May 2026
|
Fixed 0.875%
|
Fixed 2.73%
|
Fixed 0.875%
|
Fixed 2.72%
|
|
Non-current
|
|
|
|
|
|
€850m bond due June 2027
|
Fixed 3.875%
|
Fixed 4.81%
|
Fixed 3.875%
|
Fixed 5.05%
|
|
€600m bond due October 2028
|
Fixed 0.500%
|
Fixed 2.17%
|
Fixed 0.500%
|
Fixed 2.17%
|
|
€600m bond due June 20301
|
Fixed 4.375%
|
Fixed 4.55%
|
Fixed 4.375%
|
Fixed 4.67%
|
|
£400m bond due June 20321
|
Fixed 5.000%
|
Fixed 5.35%
|
Fixed 5.000%
|
Fixed 5.30%
|
|
$750m bond due April 20302
|
Fixed 5.000%
|
Fixed 5.20%
|
-
|
-
|
|
$500m bond due April 20352
|
Fixed 5.625%
|
Fixed 5.73%
|
-
|
-
|
|
Average cost of bond debt at year-end rates
|
|
4.38%
|
|
4.16%
|
1. Bonds not in hedging relationship in 2024.
2. Bonds not in hedging relationship in 2025.
During April 2025, the Group issued two new bonds totalling
$1.25bn, consisting of $750m due 2030 and $500m due 2035. Part of
the proceeds was used to settle the $700m term loan.
On 2 March 2026, Rentokil Initial plc redeemed in full the
€500m 0.8750% Senior Unsecured Notes due 30 May 2026, at
their principal amount together with accrued interest. The
redemption was carried out in accordance with the terms and
conditions of the notes.
The effective hedged interest rate reflects the interest rate
payable after the impact of interest due from cross-currency swaps.
The Group's hedging strategy is to hold foreign currency debt in
proportion to foreign currency profit and cash flows, which are
mainly in Euro and US dollar. As a result, the Group has swapped a
portion of the bonds it has issued into US dollars, thus increasing
the effective hedged interest rate.
The Group considers the fair value of other current liabilities to
be equal to the carrying value.
13. Fair value estimation
All financial instruments held at fair value are classified by
reference to the source of inputs used to derive the fair value.
The following hierarchy is used:
|
Level 1 -
|
unadjusted quoted prices in active markets for identical assets or
liabilities;
|
||
|
Level 2 -
|
inputs other than quoted prices that are observable for the asset
or liability, either directly as prices or indirectly through
modelling based on prices; and
|
||
|
Level 3 -
|
inputs for the asset or liability that are not based on observable
market data.
|
||
|
Financial instrument
|
Hierarchy level
|
Valuation method
|
|
|
Financial assets traded in active markets
|
1
|
Current bid price
|
|
|
Financial liabilities traded in active markets
|
1
|
Current ask price
|
|
|
Listed bonds
|
1
|
Quoted market prices
|
|
|
Money market funds
|
1
|
Quoted market prices
|
|
|
Interest rate/currency swaps
|
2
|
Discounted cash flow based on market swap rates
|
|
|
Forward foreign exchange contracts
|
2
|
Forward exchange market rates
|
|
|
Borrowings not traded in active markets (term loans and uncommitted
facilities)
|
2
|
Nominal value
|
|
|
Money market deposits
|
2
|
Nominal value
|
|
|
Trade payables and receivables
|
2
|
Nominal value less estimated credit adjustments
|
|
|
Contingent consideration (including put option
liability)
|
3
|
Discounted cash flow using weighted average cost of
capital
|
|
|
|
|
|
|
|
|
Fair value
assets
2025
$m
|
Fair value
liabilities
2025
$m
|
Fair value
assets
2024
$m
|
Fair value
liabilities
2024
$m
|
|
|
Cross currency interest rate swaps and interest rate swaps (level
2):
|
|
|
|
|
|
|
|
-
non-hedge
|
-
|
-
|
-
|
-
|
|
|
-
net investment hedge
|
144
|
(10)
|
29
|
(23)
|
|
|
-
cash flow hedge
|
29
|
(7)
|
1
|
(35)
|
|
|
-
fair value hedge
|
4
|
(6)
|
-
|
-
|
|
Foreign exchange swaps (level 2):
|
|
|
|
|
|
|
|
-
non-hedge
|
5
|
-
|
-
|
(4)
|
|
|
182
|
(23)
|
30
|
(62)
|
|
|
Analysed as follows:
|
|
|
|
|
|
|
Current portion
|
61
|
(5)
|
-
|
(4)
|
|
|
Non-current portion
|
121
|
(18)
|
30
|
(58)
|
|
|
Derivative financial instruments
|
182
|
(23)
|
30
|
(62)
|
|
|
|
|
|
|
|
|
|
Contingent consideration (including put option liability) (level
3)
|
-
|
(70)
|
-
|
(94)
|
|
|
Analysed as follows:
|
|
|
|
|
|
|
Current portion
|
-
|
(49)
|
-
|
(47)
|
|
|
Non-current portion
|
-
|
(21)
|
-
|
(47)
|
|
|
Other payables
|
-
|
(70)
|
-
|
(94)
|
|
Certain interest rate swaps have been bifurcated to manage
different foreign exchange risks. The interest rate swaps are shown
on the balance sheet as net derivative assets of $182m (2024: $8m)
and net derivative liabilities of $22m (2024: $40m).
Given the volume of acquisitions and the variety of inputs to the
valuation of contingent consideration (depending on each
transaction), there are not considered to be any changes in input
that would have a material impact on the contingent consideration
liability.
|
|
Contingent consideration
2025
$m
|
Contingent consideration
2024
$m
|
|
At 1 January
|
94
|
97
|
|
Exchange differences
|
7
|
(3)
|
|
Acquisitions
|
13
|
39
|
|
Payments
|
(17)
|
(32)
|
|
Unused amount reversed
|
(25)
|
(9)
|
|
Revaluation of put option
|
(2)
|
2
|
|
At 31 December
|
70
|
94
|
Fair value is equal to carrying value for all other trade and other
payables.
The table below analyses the Group's undiscounted cash flows on
borrowings and derivative financial instruments that will be
settled on a gross basis, into relevant maturity groupings based on
the remaining period to the contractual maturity date at the
balance sheet date.
|
|
Less than 1 year
$m
|
Between 1 and 5 years
$m
|
More than 5 years
$m
|
Total
$m
|
|
|
At 31 December 2025
|
|
|
|
|
|
|
Non-derivative financial instruments
|
|
|
|
|
|
|
Borrowings
|
(1,518)
|
(3,676)
|
(1,217)
|
(6,411)
|
|
|
|
(1,518)
|
(3,676)
|
(1,217)
|
(6,411)
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
Cross-currency interest rate swaps:
|
|
|
|
|
|
|
|
-
outflow
|
(802)
|
(1,349)
|
-
|
(2,151)
|
|
|
-
inflow
|
836
|
1,444
|
-
|
2,280
|
|
Interest rate swaps:
|
|
|
|
|
|
|
|
-
outflow
|
(3)
|
(7)
|
-
|
(10)
|
|
|
-
inflow
|
-
|
-
|
8
|
8
|
|
Foreign exchange swaps:
|
|
|
|
|
|
|
|
-
outflow
|
(284)
|
-
|
-
|
(284)
|
|
|
-
inflow
|
289
|
-
|
-
|
289
|
|
Foreign exchange forwards:
|
|
|
|
|
|
|
|
-
outflow
|
(48)
|
-
|
-
|
(48)
|
|
|
-
inflow
|
48
|
-
|
-
|
48
|
|
|
35
|
88
|
8
|
131
|
|
|
Net outflow
|
(1,483)
|
(3,588)
|
(1,209)
|
(6,280)
|
|
|
At 31 December 2024
|
|
|
|
|
|
|
Non-derivative financial instruments
|
|
|
|
|
|
|
Borrowings
|
(1,534)
|
(2,314)
|
(1,224)
|
(5,072)
|
|
|
|
(1,534)
|
(2,314)
|
(1,224)
|
(5,072)
|
|
|
Derivative financial instruments
|
|
|
|
|
|
|
Cross-currency interest rate swaps:
|
|
|
|
|
|
|
|
-
outflow
|
(59)
|
(2,122)
|
-
|
(2,181)
|
|
|
-
inflow
|
31
|
2,032
|
-
|
2,063
|
|
Interest rate swaps:
|
|
|
|
|
|
|
|
-
outflow
|
-
|
-
|
-
|
-
|
|
|
-
inflow
|
-
|
-
|
-
|
-
|
|
Foreign exchange swaps:
|
|
|
|
|
|
|
|
-
outflow
|
(455)
|
-
|
-
|
(455)
|
|
|
-
inflow
|
451
|
-
|
-
|
451
|
|
Foreign exchange forwards:
|
|
|
|
|
|
|
|
-
outflow
|
(13)
|
-
|
-
|
(13)
|
|
|
-
inflow
|
13
|
-
|
-
|
13
|
|
|
(32)
|
(90)
|
-
|
(122)
|
|
|
Net outflow
|
(1,566)
|
(2,404)
|
(1,224)
|
(5,194)
|
|
14. Provisions for liabilities and charges
The Group has provisions for termite damage claims, self-insurance,
environmental, and other. Provisions are recognised when the Group
has a present obligation as a result of past events, it is
probable that an outflow of resources will be required to settle
the obligation, and the amount is capable of being reliably
estimated. If such an obligation is not capable of being reliably
estimated it is classified as a contingent liability.
Future cash flows relating to these obligations are discounted when
the effect is material. The effect of discounting environmental
provisions and other provisions is not considered to be
material due to the low level of expected future cash flows.
Termite damage claim provisions and self-insurance provisions
are discounted, and the majority of these provisions are held in
the US. discount rate used is based on US government bond rates,
and was 3.94%-5.16% (2024: 4.48%-5.25%).
|
|
Termite damage claims
$m
|
Self-insurance
$m
|
Environmental
$m
|
Other
$m
|
Total
$m
|
|
At 1 January 2024
|
330
|
209
|
21
|
14
|
574
|
|
Exchange differences
|
-
|
-
|
(1)
|
(1)
|
(2)
|
|
Additional provisions
|
25
|
126
|
1
|
10
|
162
|
|
Used during the year
|
(86)
|
(105)
|
(3)
|
(12)
|
(206)
|
|
Unused amounts reversed
|
(16)
|
-
|
(1)
|
(2)
|
(19)
|
|
Acquisition of companies and businesses
|
-
|
-
|
-
|
2
|
2
|
|
Unwinding of discount on provisions
|
13
|
1
|
-
|
-
|
14
|
|
At 31 December 2024
|
266
|
231
|
17
|
11
|
525
|
|
|
|
|
|
|
|
|
At 1 January 2025
|
266
|
231
|
17
|
11
|
525
|
|
Exchange differences
|
-
|
-
|
-
|
2
|
2
|
|
Additional provisions
|
201
|
126
|
6
|
10
|
343
|
|
Used during the year
|
(95)
|
(89)
|
(3)
|
(12)
|
(199)
|
|
Unused amounts reversed
|
-
|
(2)
|
-
|
(3)
|
(5)
|
|
Acquisition of companies and businesses
|
-
|
-
|
-
|
2
|
2
|
|
Disposal of companies and businesses
|
-
|
-
|
(9)
|
-
|
(9)
|
|
Unwinding of discount on provisions
|
12
|
1
|
-
|
-
|
13
|
|
At 31 December 2025
|
384
|
267
|
11
|
10
|
672
|
|
|
2025
Total
$m
|
2024
Total
$m
|
|
Analysed as follows:
|
|
|
|
Non-current
|
397
|
381
|
|
Current
|
275
|
144
|
|
Total
|
672
|
525
|
Termite damage claims
The Group holds provisions for termite damage claims covered by
contractual warranties. Termite damage claim provisions are subject
to significant assumptions and estimation uncertainty. The
assumptions included in valuing termite provisions are based on an
estimate of the volume and value of future claims (based on
historical), customer churn rates, discount rates and inflation.
Additional amendments may be necessary based on specific underlying
facts of the particular legal claim as and when they develop. These
provisions are expected to be substantially utilised within the
next 15 years at a declining rate. The trend of volume and value of
claims is monitored and reviewed over time (with the support of
external advisors). It is reasonably possible, based on experience
to date, that outcomes within the next financial year that are
different from the assumption could require an adjustment to the
carrying amount of the provision.
The Group's provision relates to legacy customer claims (contracts
from the period prior to the acquisition of Terminix), estimated at
$358m (2024: $246m); and new customer claims, estimated at $26m
(2024: $20m). The sensitivity of the legacy claims liability
balance to changes in the inputs is illustrated as
follows:
|
●
|
Discount rate - The exposure to termite damage claims is
largely based within the US, therefore measurement is based on a
seven-year US bond risk-free rate. During 2025, interest rates (and
therefore discount rates) have decreased. Rates could move in
either direction and management has modelled that an
increase/decrease of 50 bps in yields would decrease/increase the
provision by $7m (2024: $6m). Over the 12 months to 31 December
2025, seven-year risk-free rate yields have decreased 54 bps from
4.48% to 3.94% (2024: increased 60 bps).
|
|
●
|
Claim value - Claim value forecasts have been based on the
latest available historical settled Termite claims. Claims values
are dependent on a range of inputs including, housing costs,
materials costs (e.g. timber), whether a claim becomes litigated or
not, and specific circumstances including contributory factors at
the premises. Management has used an average of claim costs for the
last 12 months for non-litigated claims and 24 months for litigated
claims, adjusted where necessary to account for ageing of claims,
to determine an estimate for costs per claim. Fluctuations in input
prices (e.g. timber prices), as have been experienced over recent
years, means that there is potential for volatility in claim values
and therefore future material changes in provisions. Management has
modelled that an increase/decrease of 5% in litigated claim values
would increase/decrease the provision by c.$5m (2024: $4m) and an
increase/decrease of 5% in non-litigated claim values would
increase/decrease the provision by c.$9m (2024: $8m). Over the 12
months to 31 December 2025, costs per litigated claim rose by c.48%
(2024: rose 8%) and non-litigated costs rose by 8% (2024: 45%).
Actual value of claims settled in the year to December 2025 has
been at a combined cost per claim 14% higher than that seen
throughout 2024. This is not representative of management's
expectation of future costs as ageing of claims, which drives an
increased cost per claim, has reduced in recent months along with a
flattening of global inflation, and cost per claim is expected to
continue to improve.
|
|
●
|
Claim rate - Management has estimated claim rates based on
historical incurred claims. Data has been captured, to establish
incidence curves that can be used to estimate likely future cash
outflows. Changes in rates of claim are largely outside the Group's
control and may depend on litigation trends within the US, and
other external factors such as how often customers move property
and how well they maintain those properties. This causes estimation
uncertainty that could lead to material changes in provision
measurement. Management has modelled that an increase/decrease of
5% in litigated claim rates would increase/decrease the provision
by c.$5m (2024: $4m) and an increase/decrease of 5% in
non-litigated claim rates would increase/decrease the provision by
c.$9m (2024: $8m) accordingly. Over the 12 months to 31 December
2025, litigated claim rates rose by 75% (2024: fell 52%) and
non-litigated claim rates fell by 6% (2024: rose 7%).
|
|
●
|
Customer churn rate - If customers choose not to renew their
contracts each year, then the assurance warranty falls away. As
such there is sensitivity to the assumption on how many customers
will churn out of the portfolio of customers each year. Data has
been captured and analysed to establish incidence curves for
customer churn, and forward-looking assumptions have been made
based on these curves. Changes in churn rates are subject to
macroeconomic factors and the performance of the Group. A 1%
increase or decrease in customer churn rates, would decrease or
increase the provision by $13m (2024: $9m), accordingly. On average
over the last 10 years churn rates have moved by +/- c.2% per annum
(2024: +/-2%).
|
|
●
|
Inflation rate - The exposure to termite damage claims is
largely based within the United States and therefore measurement is
based on expected long term inflation trends. Settlement costs are
driven by a number of factors as discussed in the claim cost
section. Management has seen a trend that these costs have tracked
above baseline US inflation rates and therefore a premium is taken
to expected future inflation rates of 1% per annum. Rates could
move in either direction and management has modelled that an
increase/decrease of 50 bps would increase/decrease the provision
by $6m (2024: $5m).
|
Self-insurance
The Group's self-insurance provisions provide coverage for
exposures related to the self-insured retention (SIR), or
excesses/deductibles, mainly on General (Public) Liability,
Third-Party Automobile Liability and Workers' Compensation
policies. In order to help mitigate the cost of external insurance,
the Group self-insures a level of cover on its major insurance
policies. At 31 December 2025, the Group recognised provisions of
$267m (2024: $231m) in relation to these risks, and the Group
retains the primary obligation for these matters. External
actuaries are used to help management estimate the provisions held.
Due to the nature of the claims, the timing of utilisation of these
provisions is uncertain.
Based on confirmed insurance coverage, and management's assessment
that reimbursement is virtually certain, a separate reimbursement
asset of $43m (2024: $30m) is recognised within Other Receivables.
The reimbursement asset is not offset against the related provision
in accordance with IAS 37.53.
Environmental
The Group owns, or formerly owned, a number of properties in Europe
and the US where environmental contamination is being managed.
These issues tend to be complex to determine and resolve and
may be material, although it is often not possible to accurately
predict future costs of management or remediation reliably.
Provisions are held where liability is probable and costs can be
reliably estimated. Contingent liabilities exist where the
conditions for recognising a provision under IAS 37 have not been
met. The Group monitors such properties to determine whether
further provisions are necessary. The provisions that have been
recognised are expected to be substantially utilised within the
next five years.
Other
Other provisions principally comprise amounts required to cover
obligations arising and costs relating to disposed businesses and
restructuring costs. Other provisions also includes costs relating
to onerous contracts and property dilapidations settlements.
Existing provisions are expected to be substantially utilised
within the next five years.
15. Share capital
The Company's share capital is made up of the shares that have been
issued to its members, whether on, or subsequent to, its
incorporation. At the year end, the Company's issued share
capital consisted of ordinary shares of 1p each, with one voting
right per share, as detailed below.
The Company does not have a limited amount of authorised capital
and does not hold any shares in treasury.
During the year, 1,500,000 new shares were issued in relation to
employee share schemes.
|
|
2025
$m
|
2024
$m
|
|
Issued and fully paid
|
|
|
|
At 31 December 2025 - 2,526,039,885 shares (2024:
2,524,539,885)
|
41
|
41
|
16. Post balance sheet events
On 2 March 2026, Rentokil Initial plc redeemed in full the
€500m 0.8750% Senior Unsecured Notes due 30 May 2026, at
their principal amount together with accrued interest. The
redemption was carried out in accordance with the terms and
conditions of the notes. There were no other significant events
between 31 December 2025 and the date of approval of these accounts
that would require amendments to or additional disclosures in the
financial statements.
Use of Non-IFRS Measures
Reconciliation of non-IFRS measures to the nearest IFRS
measure
The Group uses a number of non-IFRS measures to present the
financial performance of the business. These are not measures as
defined under IFRS, but management believes that these measures
provide valuable additional information for users of the Financial
Statements, in order to better understand the underlying trading
performance in the year from activities that will contribute to
future performance. The Group's internal strategic planning process
is also based on these measures and they are used for management
incentive purposes. They should be viewed as complements to, and
not replacements for, the comparable IFRS measures. Other companies
may use similarly labelled measures which are calculated
differently from the way the Group calculates them, which limits
their usefulness as comparative measures. Accordingly, investors
should not place undue reliance on these non-IFRS
measures.
The following sets out an explanation and the reconciliation to the
nearest IFRS measure for each non-IFRS measure. All non-IFRS
measures exclude discontinued operations unless explicitly stated
otherwise.
Constant exchange rates (CER)
Given the international nature of the Group's operations, foreign
exchange movements can have a significant impact on the reported
results of the Group when they are translated into US dollar (the
presentation currency of the Group).
In order to help understand the underlying trading performance of
the business, revenue and profit measures are often presented at
constant exchange rates. CER is calculated by translating prior
year reported numbers at the average exchange rates for the current
year. This represents a change from prior periods in which CER was
calculated by a translation of current year reported numbers at the
average exchange rates for the prior year. It is used to give
management and other users of the accounts clearer comparability of
underlying trading performance against the prior period by removing
the effects of changes in foreign exchange rates. The major
exchange rates used to calculate CER in 2025 are $/€0.8917
and $/£0.7613.
Comparisons are with the year ended 31 December 2024 unless
otherwise stated.
Organic Revenue Growth
Acquisitions are a core part of the Group's growth strategy. The
Organic Revenue Growth measures (absolute and percentage) are used
to help investors and management understand the underlying
performance, of the business, by identifying Organic Revenue Growth
excluding the impact of Acquired Revenue. This approach isolates
changes in performance of the Group that take place under the
Company's stewardship, and thereby reflects the potential benefits
and risks associated with owning and managing a professional
services business.
Organic Revenue Growth is calculated based on year-over-year
revenue growth at CER to eliminate the effects of movements in
foreign exchange rates.
Acquired Revenue represents a 12-month estimate of the increase in
Group revenue from each business acquired. Acquired Revenue is
calculated as: (a) the revenue from the acquisition date to the
year end in the year of acquisition in line with IFRS 3; and (b)
the pre-acquisition revenues from 1 January up to the
acquisition date in the year of acquisition. The pre-acquisition
revenue is based on the previously reported revenues of the
acquired entity and is considered to be an estimate.
In the year a business is acquired, all of its revenue reported
under (a) above is classified as non-organic growth. In the
subsequent first full financial year after acquisition, Organic
Revenue Growth is calculated for each acquisition as the reported
revenue less Acquired Revenue.
At a Group level, calculating Organic Revenue Growth therefore
involves isolating and excluding from the total year-over-year
revenue change: (i) the impacts from foreign exchange rate changes;
(ii) the growth in revenues that have resulted from completed
acquisitions in the current period; and (iii) the estimate of
pre-acquisition revenues from each business acquired. The sum of
(ii) and (iii) is equal to the total Acquired Revenues for all
acquisitions. The calculated Organic Revenue is expressed as a
percentage of prior year revenue. Prior year revenue is not
'pro-forma' adjusted in the calculation, as any such estimated
adjustments would have an immaterial impact.
If an acquisition is considered to be a material transaction, such
as the Terminix acquisition in October 2022, the above calculation
is amended in order to give a 'pro-forma' view of any Organic
Revenue Growth for the full financial year in the year of
acquisition, as if the acquisition had been part of the Group from
the beginning of the prior year. The pro-forma calculation is
completed using pre-acquisition revenues to normalise current and
prior periods as shown in the table below. These revenue
normalisations are considered estimates, and ensure that the
potentially larger Organic Revenue Growth is measured over a
denominator that includes the material acquisition.
While management believes that the methodology used in the
calculation of Organic Revenue is representative of the performance
of the Group, the calculations may not be comparable with
similarly labelled measures presented by other publicly traded
companies in similar or other industries.
|
|
North
America
$m
|
International
$m
|
Total
$m
|
|
2024 Revenue
|
4,164
|
2,453
|
6,617
|
|
2024 Exchange differences
|
(3)
|
40
|
37
|
|
2024 Revenue (at 2025 CER)
|
4,161
|
2,493
|
6,654
|
|
2024 Revenue from closed businesses1
|
(18)
|
|
(18)
|
|
Normalised 2024 Revenue (at 2025 CER) - base for Organic Revenue
Growth percentage
|
4,143
|
2,493
|
6,636
|
|
Revenue from 2025 acquisitions (at 2025 CER)²
|
15
|
15
|
30
|
|
Revenue from 2024 acquisitions (at 2025 CER)³
|
41
|
31
|
72
|
|
Organic Revenue Growth 2025 (at 2025 CER)
|
95
|
75
|
170
|
|
2025 Revenue (at AER)
|
4,294
|
2,614
|
6,908
|
|
Organic Revenue Growth %
|
2.3%
|
3.0%
|
2.6%
|
1. The adjustment removes revenue from 1 January 2024 to 31 March
2024 from the Paragon distribution business, closed with effect
from 1 April 2024.
2. Revenue from completed acquisitions in the current
period.
3. Estimate of revenue from each business acquired by the Group in
the previous financial year through to the 12-month anniversary of
the Group's ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all
entities in the Group's continuing operations as at 31 December
2024.
|
|
North
America
$m
|
International
$m
|
Total
$m
|
|
2023 Revenue
|
4,112
|
2,273
|
6,385
|
|
2023 Exchange differences
|
(3)
|
31
|
28
|
|
2023 Revenue (at 2025 CER)
|
4,109
|
2,304
|
6,413
|
|
2023 Revenue from closed businesses1
|
(56)
|
|
(56)
|
|
Normalised 2023 Revenue (at 2025 CER) - base for Organic Revenue
Growth percentage
|
4,053
|
2,304
|
6,357
|
|
Revenue from 2024 acquisitions (at 2025 CER)²
|
28
|
59
|
87
|
|
Revenue from 2023 acquisitions (at 2025 CER)³
|
18
|
30
|
48
|
|
Organic Revenue Growth 2024 (at 2025 CER)
|
62
|
100
|
162
|
|
Exchange differences
|
3
|
(40)
|
(37)
|
|
2024 Revenue (at AER)
|
4,164
|
2,453
|
6,617
|
|
Organic Revenue Growth %
|
1.5%
|
4.4%
|
2.6%
|
1. The adjustment removes revenue from 1 April 2023 to 31 December
2023 from the Paragon distribution business, closed with effect
from 1 April 2024.
2. Revenue from completed acquisitions in the current
period.
3. Estimate of revenue from each business acquired by the Group in
the previous financial year through to the 12-month anniversary of
the Group's ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all
entities in the Group as at 31 December 2023.
Adjusted expenses and profit measures
Adjusted expenses and profit measures are used to give investors
and management a further understanding of the underlying
profitability of the business over time by stripping out income and
expenses that can distort results due to their size and nature.
Adjusted profit measures are calculated by adding the following
items back to the equivalent IFRS profit measure:
|
●
|
amortisation and impairment of intangible assets (excluding
computer software);
|
|
●
|
one-off and adjusting items; and
|
|
●
|
net interest adjustments.
|
Intangible assets (such as customer lists and brands) are
recognised on acquisition of businesses which, by their nature, can
vary by size and amount each year. Capitalisation of
innovation-related development costs will also vary from year to
year. As a result, amortisation of intangibles is added back to
assist with understanding the underlying trading performance of the
business and to allow comparability across regions and
categories.
One-off and adjusting items are significant expenses or income that
will have a distortive impact on the underlying profitability of
the Group. Typical examples are costs related to the acquisition of
businesses, gain or loss on disposal or closure of a business,
material gains or losses on disposal of fixed assets, adjustments
to legacy environmental and legacy termite liabilities, and
payments or receipts as a result of legal disputes. An analysis of
one-off and adjusting items is set out below.
Net interest adjustments are other non-cash, or one-off and
adjusting accounting gains and losses, that can cause material
fluctuations and distort understanding of the performance of the
business, such as amortisation of discount on legacy provisions and
gains and losses on hedge accounting.
Adjusted expenses are one-off and adjusting items, and Adjusted
Interest. Adjusted profit measures used are Adjusted Operating
Profit, Adjusted Profit Before and After Tax, and Adjusted EBITDA.
Adjusted Earnings Per Share is also reported, derived from Adjusted
Profit After Tax.
One-off and adjusting items
An analysis of one-off and adjusting items is set out
below.
|
|
One-off and adjusting items cost/(income)
$m
|
One-off and adjusting items tax impact
$m
|
One-off and adjusting items cash (outflow)/inflow
$m
|
|
2023
|
|
|
|
|
Acquisition and integration costs
|
15
|
(2)
|
(16)
|
|
Fees relating to Terminix acquisition
|
1
|
-
|
(31)
|
|
Terminix integration costs
|
99
|
(26)
|
(92)
|
|
Other
|
4
|
(1)
|
6
|
|
Total
|
119
|
(29)
|
(133)
|
|
2024
|
|
|
|
|
Acquisition and integration costs
|
11
|
(4)
|
(19)
|
|
Terminix integration costs
|
75
|
(19)
|
(77)
|
|
Other
|
24
|
(6)
|
(3)
|
|
Total
|
110
|
(29)
|
(99)
|
|
2025
|
|
|
|
|
Acquisition and integration costs
|
(5)
|
1
|
(18)
|
|
Termite provision movement
|
195
|
(50)
|
-
|
|
North America transformation costs
|
77
|
(20)
|
(76)
|
|
Other
|
20
|
(3)
|
(6)
|
|
Total
|
287
|
(72)
|
(100)
|
Adjusted Interest
Adjusted Interest is calculated by adjusting the reported finance
income and costs by net interest adjustments (amortisation of
discount on legacy provisions and foreign exchange and hedge
accounting ineffectiveness).
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Finance cost
|
250
|
250
|
232
|
|
Finance income
|
(46)
|
(59)
|
(60)
|
|
Add back:
|
|
|
|
|
Amortisation of discount on legacy provisions
|
(12)
|
(13)
|
(14)
|
|
Foreign exchange and hedge accounting ineffectiveness
|
12
|
(3)
|
15
|
|
Adjusted Interest
|
204
|
175
|
173
|
Adjusted Operating Profit
Adjusted Operating Profit is calculated by adding back one-off and
adjusting items, and amortisation and impairment of intangible
assets to operating profit.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Operating profit
|
584
|
644
|
727
|
|
Add back:
|
|
|
|
|
One-off and adjusting items
|
287
|
110
|
119
|
|
Amortisation and impairment of intangible assets1
|
199
|
254
|
218
|
|
Adjusted Operating Profit
|
1,070
|
1,008
|
1,064
|
1. Excluding computer software.
Adjusted Profit Before and After Tax
Adjusted Profit Before Tax is calculated by adding back net
interest adjustments, one-off and adjusting items, and amortisation
and impairment of intangible assets to profit before tax. Adjusted
Profit After Tax is calculated by adding back net interest
adjustments, one-off and adjusting items, amortisation and
impairment of intangible assets, and the tax effect on these
adjustments to profit after tax.
|
2025
|
||||||
|
|
IFRS
measures
$m
|
Net interest
adjustments
$m
|
One-off
and
adjusting
items
$m
|
Amortisation
and
impairment of
intangibles
$m
|
Non-IFRS
measures
$m
|
|
|
Profit before income tax
|
390
|
-
|
287
|
199
|
876
|
Adjusted Profit Before Tax
|
|
Income tax expense
|
(100)
|
1
|
(72)
|
(51)
|
(222)
|
Tax on Adjusted Profit
|
|
Profit for the period
|
290
|
1
|
215
|
148
|
654
|
Adjusted Profit After Tax
|
|
2024
|
||||||
|
|
IFRS
measures
$m
|
Net interest
adjustments
$m
|
One-off
and
adjusting
items
$m
|
Amortisation
and
impairment of
intangibles
$m
|
Non-IFRS
measures
$m
|
|
|
Profit before income tax
|
462
|
16
|
110
|
254
|
842
|
Adjusted Profit Before Tax
|
|
Income tax expense
|
(116)
|
(4)
|
(29)
|
(55)
|
(204)
|
Tax on Adjusted Profit
|
|
Profit for the period
|
346
|
12
|
81
|
199
|
638
|
Adjusted Profit After Tax
|
|
2023
|
||||||
|
|
IFRS
measures
$m
|
Net interest
adjustments
$m
|
One-off
and
adjusting
items
$m
|
Amortisation
and
impairment of
intangibles
$m
|
Non-IFRS
measures
$m
|
|
|
Profit before income tax
|
566
|
(1)
|
119
|
218
|
902
|
Adjusted Profit Before Tax
|
|
Income tax expense
|
(129)
|
(2)
|
(29)
|
(55)
|
(215)
|
Tax on Adjusted Profit
|
|
Profit for the period
|
437
|
(3)
|
90
|
163
|
687
|
Adjusted Profit After Tax
|
1. Excluding computer software.
EBITDA and Adjusted EBITDA
EBITDA is calculated by adding back finance income, finance cost,
share of profit from associates net of tax, income tax expense,
depreciation, amortisation and impairment of intangible assets, and
other non-cash expenses to profit for the year. Adjusted EBITDA is
calculated by adding back one-off and adjusting items to
EBITDA.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Profit for the period
|
290
|
346
|
437
|
|
Add back:
|
|
|
|
|
Finance income
|
(46)
|
(59)
|
(60)
|
|
Finance cost
|
250
|
250
|
232
|
|
Share of profit from associates net of tax
|
(10)
|
(9)
|
(11)
|
|
Income tax expense
|
100
|
116
|
129
|
|
Depreciation
|
329
|
312
|
300
|
|
Other non-cash expenses
|
31
|
45
|
37
|
|
Amortisation and impairment of intangible assets1
|
199
|
254
|
218
|
|
EBITDA
|
1,143
|
1,255
|
1,282
|
|
One-off and adjusting items
|
287
|
110
|
119
|
|
Adjusted EBITDA
|
1,430
|
1,365
|
1,401
|
|
|
|
|
|
|
EBITDA attributable to discontinued operations
|
109
|
139
|
122
|
|
EBITDA for the Group
|
1,252
|
1,394
|
1,404
|
|
|
|
|
|
|
Adjusted EBITDA attributable to discontinued
operations
|
109
|
139
|
122
|
|
Adjusted EBITDA for the Group including discontinued
operations
|
1,539
|
1,504
|
1,523
|
1. Excluding computer software.
Adjusted Earnings Per Share
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company by the weighted
average number of shares in issue during the year, and is explained
in Note 6. Adjusted Earnings Per Share is calculated by dividing
adjusted profit from continuing operations attributable to equity
holders of the Company by the weighted average number of
ordinary shares in issue and is shown below.
For Adjusted Diluted Earnings Per Share, the weighted average
number of ordinary shares in issue is adjusted to include all
potential dilutive ordinary shares. The Group's potentially
dilutive ordinary shares are explained in Note 6.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Profit attributable to equity holders of the Company
|
290
|
346
|
437
|
|
Add back:
|
|
|
|
|
Net interest adjustments
|
-
|
16
|
(1)
|
|
One-off and adjusting items
|
287
|
110
|
119
|
|
Amortisation and impairment of intangibles1
|
199
|
254
|
218
|
|
Tax on above items2
|
(122)
|
(88)
|
(86)
|
|
Adjusted profit attributable to equity holders of the
Company
|
654
|
638
|
687
|
|
|
|
|
|
|
Weighted average number of ordinary shares in issue
(million)
|
2,524
|
2,521
|
2,516
|
|
Adjustment for potentially dilutive shares (million)
|
11
|
7
|
11
|
|
Weighted average number of ordinary shares for diluted earnings per
share (million)
|
2,535
|
2,528
|
2,527
|
|
|
|
|
|
|
Basic Adjusted Earnings Per Share (cents)
|
25.91
|
25.31
|
27.31
|
|
Diluted Adjusted Earnings Per Share (cents)
|
25.80
|
25.24
|
27.19
|
1. Excluding computer software.
2. The tax effect on add-backs is as follows: one-off and adjusting
items $72m (2024: $29m; 2023: $29m); amortisation and impairment of
intangibles $51m (2024: $55m; 2023: $55m); and, net interest
adjustments $(1)m (2024: $4m; 2023: $2m).
Adjusted cash measures
The Group aims to generate sustainable cash flow in order to
support its acquisition programme and to fund dividend payments to
shareholders. Management considers that this is useful information
for investors. Adjusted cash measures in use are Free Cash Flow,
Adjusted Free Cash Flow, and Adjusted Free Cash Flow
Conversion.
Free Cash Flow
Free Cash Flow is measured as net cash flows from operating
activities, adjusted for cash flows related to the purchase and
sale of property, plant, equipment and intangible assets, cash
flows related to leased assets, cash flows related to one-off and
adjusting items, and dividends received from associates. These
items are considered by management to be non-discretionary, as
continued investment in these assets is required to support
the day-to-day operations of the business. Free Cash Flow is
used by management for incentive purposes and is a measure shared
with and used by investors.
A reconciliation of net cash flows from operating activities in the
Consolidated Cash Flow Statement to Free Cash Flow is provided in
the table below.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Net cash flows from operating activities
|
872
|
743
|
802
|
|
Purchase of property, plant, equipment
|
(136)
|
(134)
|
(122)
|
|
Purchase of intangible assets
|
(60)
|
(56)
|
(55)
|
|
Capital element of lease payments and initial direct costs
incurred
|
(186)
|
(177)
|
(181)
|
|
Proceeds from sale of property, plant, equipment and
software
|
20
|
5
|
17
|
|
Cash impact of one-off and adjusting items
|
100
|
99
|
132
|
|
Dividends received from associates
|
5
|
14
|
5
|
|
Free Cash Flow
|
615
|
494
|
598
|
|
|
|
|
|
|
Free Cash flow attributable to discontinued operations
|
21
|
32
|
22
|
|
Free Cash Flow for the Group including discontinued
operations
|
636
|
526
|
620
|
Adjusted Free Cash Flow and Adjusted Free Cash Flow
Conversion
Adjusted Free Cash Flow Conversion is provided to demonstrate to
investors the proportion of Adjusted Profit After Tax that is
converted to cash. It is calculated by dividing Adjusted
Free Cash Flow by Adjusted Profit After Tax, expressed as a
percentage. Adjusted Free Cash Flow is measured as Free Cash Flow
adjusted for product development additions and net investment hedge
cash interest through other comprehensive income. Product
development additions are adjusted due to their variable size and
non-underlying nature. Net investment hedge cash interest
through other comprehensive income is adjusted because the
cash relates to an item that is not recognised in Adjusted Profit
After Tax.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Free Cash Flow
|
615
|
494
|
598
|
|
Product development additions
|
13
|
11
|
13
|
|
Net investment hedge cash interest through Other Comprehensive
Income
|
10
|
13
|
15
|
|
Adjusted Free Cash Flow (a)
|
638
|
518
|
626
|
|
Adjusted Profit After Tax (b)
|
654
|
638
|
687
|
|
Free Cash Flow conversion (a/b)
|
97.6%
|
81.2%
|
91.1%
|
|
|
|
|
|
|
Free Cash Flow conversion attributable to discontinued
operations
|
69.4%
|
82.1%
|
62.6%
|
|
Free Cash Flow conversion for the Group including discontinued
operations
|
96.3%
|
81.2%
|
89.7%
|
The nearest IFRS-based equivalent measure to Adjusted Free Cash
Flow Conversion would be Cash Conversion, which is shown in the
table below to provide a comparison in the calculation. Cash
Conversion is calculated as net cash flows from operating
activities divided by profit attributable to equity holders of
the Company, expressed as a percentage. Management considers that
this is useful information for investors as it gives
an indication of the quality of profits, and ability of the
Group to turn profits into cash flows.
|
|
2025$m
|
2024$m
|
2023$m
|
|
Net cash flows from operating activities (a)
|
872
|
743
|
802
|
|
Profit attributable to equity holders of the Company
(b)
|
290
|
346
|
437
|
|
Cash Conversion (a/b)
|
300.7%
|
214.7%
|
183.5%
|
|
|
|
|
|
|
Cash Conversion attributable to discontinued
operations
|
55.6%
|
271.7%
|
308.1%
|
|
Cash Conversion for the Group including discontinued
operations
|
206.8%
|
221.4%
|
193.2%
|
Adjusted Effective Tax Rate (Adjusted ETR)
Adjusted Effective Tax Rate is used to show investors and
management the rate of tax applied to the Group's Adjusted Profit
Before Tax. The measure is calculated by dividing
Adjusted Income Tax Expense by Adjusted Profit Before Tax,
expressed as a percentage.
|
|
2025
$m
|
2024
$m
|
2023
$m
|
|
Income tax charge
|
100
|
116
|
129
|
|
Tax adjustments on:
|
|
|
|
|
Amortisation and impairment of intangible assets1
|
51
|
55
|
55
|
|
Net interest adjustments
|
(1)
|
4
|
2
|
|
One-off and adjusting items
|
72
|
29
|
29
|
|
Adjusted Income Tax Charge (a)
|
222
|
204
|
215
|
|
Adjusted Profit Before Tax (b)
|
876
|
842
|
902
|
|
Adjusted Effective Tax Rate (a/b)
|
25.3%
|
24.2%
|
23.8%
|
1. Excluding computer software.
The Group's effective tax rate (ETR) for 2025 on reported profit
before tax was 25.6% (2024: 25.1%; 2023: 22.8%). The Group's
Adjusted ETR before amortisation of intangible assets (excluding
computer software), one-off and adjusting items, and the net
interest adjustments for 2025 was 25.3% (2024: 24.2%; 2023: 23.8%).
This compares with a blended rate of tax for the countries in which
the Group operates of 25.3% (2024: 25.3%; 2023:
25.1%).
The Group's tax charge and Adjusted ETR will be influenced by the
global mix and level of profits, changes in future tax rates and
other tax legislation, foreign exchange rates, the utilisation of
brought-forward tax losses on which no deferred tax asset has been
recognised, the resolution of open issues with various tax
authorities, acquisitions and disposals.
17. Legal statements
The financial information for the year ended 31 December 2025
contained in this preliminary announcement has been approved by the
Board and authorised for release on 5 March 2026.
The financial information in this statement does not constitute the
Company's statutory accounts for the years ended 31 December 2025
or 2024. The financial information for 2024 and 2025 is derived
from the statutory accounts for 2024 (which have been delivered to
the registrar of companies) and 2025 (which will be delivered to
the registrar of companies following the AGM in May 2026). The
auditors have reported on the 2024 and 2025 accounts; their report
was (i) unqualified, (ii) did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
The statutory accounts for 2025 are prepared in accordance with
UK-adopted International Accounting Standards and International
Financial Reporting Standards (IFRSs) as issued by the
International Accounting Standards Board (IASB). The accounting
policies (that comply with IFRS) used by Rentokil Initial plc ("the
Group") are consistent with those set out in the 2024 Annual
Report. A full list of accounting policies will be presented in the
2025 Annual Report. For details of new accounting policies
applicable to the Group in 2025 and their impact please refer to
Note 1.
18. 2025 Annual Report
Copies of the 2025 Annual Report will be sent to shareholders who
have elected to receive hard copies on or around 25 March 2026 and
will also be available from the Company's registered office by
contacting the Company Secretariat
(secretariat@rentokil-initial.com) and at www.rentokil-initial.com
in PDF format.
19. Financial calendar
The Company's Annual General Meeting will be held at, and be
broadcast from, the Company's offices at Compass House, Manor
Royal, Crawley, West Sussex, RH10 9PY at 2.00pm on 7 May 2026 (UK
time). Shareholders should refer to the Notice of Meeting and the
Company's website at www.rentokil-initial.com/agm for further
information on the AGM.
20. Responsibility statements
The Directors consider that the Annual Report, which includes the
Financial Statements, complies with the Disclosure Guidance and
Transparency Rules of the United Kingdom's Financial Conduct
Authority in respect of the requirement to produce an annual
financial report.
Each of the Directors, whose names and functions are set out in the
2025 Annual Report, confirms that, to the best of their
knowledge:
the
Group Financial Statements, which have been prepared in accordance
with UK-adopted International Accounting Standards and
International Reporting Financial Standards as issued by the
International Accounting Standards Board, give a true and fair view
of the assets, liabilities, financial position and profit of the
Group;
the
Company's Financial Statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS
101 'Reduced Disclosure Framework', give a true and fair view of
the assets, liabilities, financial position and profit of the
Company; and
the
Annual Report includes a fair review of the development and
performance of the business and the position of the Group, together
with a description of the principal risks and uncertainties that it
faces.
By Order of the Board
Andy Ransom
Chief Executive
5 March 2026
Cautionary statement
In order to utilise the 'safe harbour' provisions of the U.S.
Private Securities Litigation Reform Act of 1995 (the "PSLRA") and
the general doctrine of cautionary statements, Rentokil Initial plc
("the Company") is providing the following cautionary statement:
This communication contains forward-looking statements within the
meaning of the PSLRA. Forward-looking statements can sometimes, but
not always, be identified by the use of forward- looking terms such
as "believes," "expects," "may," "will," "shall," "should,"
"would," "could," "potential," "seeks," "aims," "projects,"
"predicts," "is optimistic," "intends," "plans," "estimates,"
"targets," "anticipates," "continues" or other comparable terms or
negatives of these terms and include statements regarding Rentokil
Initial's intentions, beliefs or current expectations concerning,
amongst other things, the results of operations of the Company and
its consolidated entities ("Rentokil Initial" or "the Group"),
financial condition, liquidity, prospects, growth, strategies and
the economic and business circumstances occurring from time to time
in the countries and markets in which Rentokil Initial operates.
Forward-looking statements are based upon current plans, estimates
and expectations that are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. The Company can
give no assurance that such plans, estimates or expectations will
be achieved and therefore, actual results may differ materially
from any plans, estimates or expectations in such forward-looking
statements. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include: the Group's ability to integrate acquisitions
successfully, or any unexpected costs or liabilities from the
Group's disposals; difficulties in integrating, streamlining and
optimising the Group's IT systems, processes and technologies,
including artificial intelligence technologies; the Group's ability
to attract, retain and develop key personnel to lead the Group's
business; the availability of a suitably skilled and qualified
labour force to maintain the Group's business; cyber security
breaches, attacks and other similar incidents, as well as
disruptions or failures in the Group's IT systems or data security
procedures and those of the Group's third-party service providers;
inflationary pressures, such as increases in wages, fuel prices and
other operating costs; weakening general economic conditions,
including changes in the global job market or decreased consumer
confidence or spending levels, especially as they may affect demand
from the Group's customers; the Group's ability to implement its
business strategies successfully, including achieving its growth
objectives; the Group's ability to retain existing customers and
attract new customers; the highly competitive nature of the Group's
industries; extraordinary events that impact the Group's ability to
service customers without interruption due to a material incident,
including a loss of its third-party distributors; the impact of
environmental, social and governance ("ESG") matters, including
those related to climate change and sustainability, on the Group's
business, reputation, results of operations, financial condition
and/or prospects; supply chain issues, which may result in product
shortages, cost increases or other disruptions to the Group's
business; the Group's ability to protect its intellectual property
and other proprietary rights that are material to the Group's
business; the Group's reliance on third parties, including
third-party vendors for business process outsourcing initiatives,
investment counterparties, and franchisees, and the risk of any
termination or disruption of such relationships or counterparty
default, fraudulent activity or litigation; any future impairment
charges, asset revaluations or downgrades; failure to comply with
the many laws and governmental regulations to which the Group is
subject or the implementation of any new or revised laws or
regulations that alter the environment in which the Group does
business, as well as the costs to the Group of complying with any
such changes and the risk of related litigation; termite damage
claims and lawsuits related thereto and any associated impacts on
the termite provision; the Group's ability to comply with safety,
health and environmental policies, laws and regulations, including
laws pertaining to the use of pesticides; any actual or perceived
failure to comply with stringent, complex and evolving laws, rules,
regulations and standards in many jurisdictions, as well as
contractual obligations, including data privacy and security, and
any litigation (including class action claims and lawsuits) related
to such actual or perceived failures; the identification of
material weaknesses in the Group's internal control over financial
reporting within the meaning of Section 404 of the Sarbanes-Oxley
Act; changes in tax laws and any unanticipated tax liabilities;
adverse credit and financial market events and conditions, which
could, among other things, impede access to or increase the cost of
financing; the restrictions and limitations within the agreements
and instruments governing the Group's indebtedness; a lowering or
withdrawal of the ratings, outlook or watch assigned to the Group's
debt securities by rating agencies; an increase in interest rates
and the resulting increase in the cost of servicing the Group's
debt; and exchange rate fluctuations and the impact on the Group's
results or the foreign currency value of the Company's ADSs and any
dividends. The list of factors presented here is representative and
should not be considered to be a complete statement of all
potential risks and uncertainties. Unlisted factors may present
significant additional obstacles to the realisation of
forward-looking statements. The Company cautions you not to place
undue reliance on any of these forward-looking statements as they
are not guarantees of future performance or outcomes and that
actual performance and outcomes, including, without limitation, the
Group's actual results of operations, financial condition and
liquidity, and the development of new markets or market segments in
which the Group operates, may differ materially from those made in
or suggested by the forward-looking statements contained in this
communication. Except as required by law, Rentokil Initial assumes
no obligation to update or revise the information contained herein,
which speaks only as of the date hereof.
The Company makes no guarantee that trends in the management of
termite damage claims will continue. Additionally, the Company
makes no guarantee that its operational improvement plans will
mitigate against or reduce the number of termite damage claims
(litigated and non-litigated) against the Company nor that these
plans will reduce the ongoing cost to resolve such
claims.
Additional information concerning these and other factors can be
found in Rentokil Initial's filings with the U.S. Securities and
Exchange Commission ("SEC"), which may be obtained free of charge
at the SEC's website, http:// www.sec.gov, and Rentokil Initial's
Annual Reports, which may be obtained free of charge from the
Rentokil Initial website,
https://www.rentokil-initial.com
No statement in this communication is intended to be a profit
forecast and no statement in this communication should be
interpreted to mean that earnings per share of Rentokil Initial for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of Rentokil
Initial.
This communication presents certain non-IFRS measures, which should
not be viewed in isolation as alternatives to the equivalent IFRS
measure; rather they should be viewed as complements to, and read
in conjunction with, the equivalent IFRS measure. Non-IFRS measures
presented also include Organic Revenue Growth, One-off and
adjusting items, Adjusted Interest, Adjusted Operating Profit,
Adjusted Profit Before and After Tax, Adjusted EBITDA, Adjusted
Earnings Per Share, Free Cash Flow, Adjusted Free Cash Flow,
Adjusted Free Cash Flow Conversion and Adjusted Effective Tax Rate.
Definitions for these measures can be found under the Use of
Non-IFRS measures section of the financial statements. The Group's
internal strategic planning process is also based on these
measures, and they are used for incentive purposes. These measures
may not be calculated in the same way as similarly named measures
reported by other companies.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Date:
05 March 2026
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RENTOKIL INITIAL PLC
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/s/
Rachel Canham
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Name:
Rachel Canham
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Title:
Group General Counsel and Company Secretary
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