Rentokil Initial PLC 6-K, filed Jul 25, 2024

Rentokil Initial PLC (RTO)

6-K 2024-07-25 For: 2024-07-25

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Added on April 11, 2026

About this 6-K

Rentokil Initial PLC filed this 6-K on July 25, 2024.

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Financial Results1	AER			CER
£m	H1 2024£m	H1 2023£m	Change%	H1 2024£m	H1 2023£m	Change%
Revenue	2,706	2,671	1.3%	2,756	2,650	4.0%
Adjusted EBITDA	611	602	1.5%
Adjusted Operating Profit	445	437	1.9%	455	434	4.7%
Adjusted Profit before Tax	383	377	1.8%	394	371	6.1%
Free Cash Flow	172	229	(24.9%)
Diluted Adjusted EPS	11.60p	11.41p

Statutory Results
Revenue	2,706	2,671	1.3%
Operating Profit	321	304	5.6%
Profit before Tax	253	240	5.6%
EPS	7.78p	7.35p
Dividend Per Share	3.16p	2.75p

●	Revenue up 4.0% and up 1.3% on a statutory basis. Organic Revenue growth of 2.8%
●	Early progress in North America growth plan with 50bps quarter-on-quarter improvement in Pest Control services organic growth (1.0% in Q1, 1.5% in Q2). Positive movement in leading indicators:
	-	Stronger North American sales colleague retention, up c.4ppts
	-	Better Terminix brand favourability from our advertising campaign that delivered 685m views
	-	Improved inbound digital lead flow volumes, up each month in Q2
	-	Increased technician sales leads participation, up from c.50% to c.61.5%
	-	Total North America Organic Revenue up 1.3% in H1 with a drag from the products distribution business
	-	Strong foundation laid for North America growth re-acceleration with more to do in lead quality, sales close rates and customer retention. To harness the growth opportunity $25m additional investment committed (c.$50m in total), including c.$15m P&L spend in FY 24
●	Good Organic Revenue growth of 4-6% in all other regions
●	Within Group business categories, Organic Pest Control up 2.2% (5.7% excluding North America), Hygiene and Wellbeing up 4.4%, France Workwear up 7.5%
●	Adjusted Operating Profit up 4.7% and Statutory Operating Profit up 5.6%. Group Adjusted Operating Margin up 10bps to 16.5%
	-	North America Adjusted Operating Margin up 10bps to 18.6%, slightly ahead of guidance
●	Terminix integration on plan with first branch integrations advancing. $162m gross and $105m net cost synergies delivered to date: $58m gross and $23m net in H1 24
●	Free Cash Flow of £172m impacted by working capital balances at period end, expected to unwind in H2
●	Dividend Per Share up 14.9%
●	Net Debt to EBITDA leverage flat at 2.8x, on track towards target range of 2-2.5x
●	23 acquisitions completed in H1 2024 with annualised revenues of c.£81m

Investors / Analysts:	Peter Russell	Rentokil Initial plc	07795 166506
Media:	Malcolm Padley	Rentokil Initial plc	07788 978199

	Revenue			Adjusted Operating Profit
	H1 2024£m	H1 2023£m	Change%	H1 2024£m	H1 2023£m	Change%
North America	1,662	1,643	1.1%	310	304	1.8%
Pest Control	1,614	1,598	1.0%	304	300	1.1%
Hygiene & Wellbeing	48	45	7.6%	6	4	51.5%

Europe (inc LATAM)	562	525	7.0%	106	97	9.1%
Pest Control	269	249	8.0%	61	57	6.9%
Hygiene & Wellbeing	177	168	5.2%	25	22	14.4%
France Workwear	116	108	7.5%	20	18	9.4%

UK & Sub Saharan Africa	213	189	13.2%	49	45	9.3%
Pest Control	101	96	5.2%	26	25	3.6%
Hygiene & Wellbeing	112	93	21.4%	23	20	16.6%

Asia & MENAT	178	165	7.5%	24	22	1.7%
Pest Control	133	121	9.2%	18	17	1.6%
Hygiene & Wellbeing	45	44	2.7%	6	5	2.2%

Pacific	135	123	10.4%	29	29	5.0%
Pest Control	69	62	12.6%	12	12	3.7%
Hygiene & Wellbeing	66	61	8.1%	17	17	5.9%

Central	6	5	8.0%	(61)	(58)	(5.5%)
Restructuring costs	-	-	-	(2)	(5)	66.6%
Total at CER	2,756	2,650	4.0%	455	434	4.7%
Total at AER	2,706	2,671	1.3%	445	437	1.9%

	Revenue			Adjusted Operating Profit
	H1 2024£m	H1 2023£m	Change%	H1 2024£m	H1 2023£m	Change%
Pest Control	2,186	2,126	2.8%	421	411	2.2%
Hygiene & Wellbeing	448	411	9.3%	77	68	14.3%
France Workwear	116	108	7.5%	20	18	9.4%
Central	6	5	8.0%	(61)	(58)	(5.5%)
Restructuring costs	-	-	-	(2)	(5)	66.6%
Total at CER	2,756	2,650	4.0%	455	434	4.7%
Total at AER	2,706	2,671	1.3%	445	437	1.9%

	H1 24AER£m	AERGrowth	H1 24CER£m	CERGrowth	Organic Growth
Revenue	1,632	(1.3%)	1,662	1.1%	1.3%
Operating Profit	243	1.4%	248	3.9%
Adjusted Operating Profit	304	(0.6%)	310	1.8%
Adjusted Operating Margin	18.6%	0.1%	18.6%	0.1%

●	People and Service. Good ongoing progress has been achieved on colleague retention, with more training and support. Service colleague retention increased to 74.3% (FY 23: 71.8%). Our renewed focus on sales colleague retention in the period led to a 3.8ppts increase to 70.2% (FY 23: 66.4%). This included an improvement in new sales colleague retention, especially at Terminix, supported by the implementation of standardised talent acquisition and onboarding processes. These trends are expected to have a positive impact on leads-to-sales conversion rates over time as colleagues with more than one year service time are typically about 50% more effective.
●	Brand Advantage. Our New 'Terminix It' brand campaign has been well received by target customers. The brand campaign, launched in mid-March, was built to peak levels in H1, resulting in 685m views by 96m people. This has delivered improved ratings in brand favourability. In Q2 there was a 29% increase in Terminix branded searches on Google and 26% increase in sales lead forms completed on Terminix.com from direct traffic.
●	Customer Acquisition. In digital marketing we've been focused on optimising the process to increase lead volume and improve lead quality. Sales leads in the channel from new customers have shown signs of promise, starting in April with year-on-year inbound lead growth and the trend continuing in May and June. This is our best performance since August 2023.
●	Technician Leads. Our 'Trusted Advisor' programme is making a positive contribution to our sales performance, as we seek to drive up the volume, value and conversion rate of technician leads. In H1 technician leads participation rates increased by 11.5ppts to c.61.5%, supported by in-market training, process upgrades and performance dashboards.
●	Sales efficiency and Pricing. Improved sales efficiency remains an area of opportunity. To improve sales conversion rates we are adding new dedicated sales area managers and driving improvement in the sales response time from initial customer contact. In H1 the work order completion rate exceeded its target of 97%. Our pricing discipline also remains strong, and we are on track to deliver target price increases through 2024.

●	Finalised merger of the legal entity, enabling branch integrations and unified contracts.
●	Developed 22 systems with over 190 features to enable integrations to commence in June - all successfully tested and deployed.
●	Harmonised multiple business processes, contracts and applications to support cost synergy delivery.
●	Designed and rolled out harmonised pay plans for field leadership as well as the National Account sales team.
●	Established aligned technician pay plans to enable harmonisation at re-route state of each local integration.
●	Harmonised all pest service lines of business and established a central product and pricing tool.
●	Launched consistent training and development plans for all sales and operations colleagues.
●	Rolled out upgraded and harmonised procurement tools.
●	Established shared reporting and KPIs for field leadership.
●	Launched a shared HR information system and harmonised policies.
●	Updated financial systems to provide a shared view of financials for management growth and reporting.
●	Upgraded IT security for global standard adherence.

●	9 branches, 160 technicians, c.10,500 Commercial customer locations, c.20,000 Residential customer locations, c.2000 National Accounts. Combined revenues of c.$37m
●	A single set of systems working well
●	100% of colleague and customer data ported across
●	100% of work orders completed by technicians

	Achieved	Incremental P&L Impact
	2022-23	H1 Actual	H2 Forecast	FY 2024
Gross Synergies	$104m	$58m	$54m	$112m
Investments	-$22m	-$35m	-$52m	-$87m
Net Synergies	$82m	$23m	$2m	$25m

Business Category	# Acquisitions	Annualised Revenue (£m)
Pest Control	16	36
Hygiene & Wellbeing	7	45
Total	23	81

Region	# Acquisitions	Annualised Revenue (£m)
North America	9	22
Europe incl. LATAM	8	13
UK & SSA	1	30
Asia & MENAT	3	11
Pacific	2	5

£m at actual exchange rates	Year to Date
£m at actual exchange rates	H1 2024 £m	H1 2023 £m	Change £m
Adjusted Operating Profit	445	437	8
Depreciation	153	147	6
Other	13	18	(5)
Adjusted EBITDA	611	602	9
One-off and adjusting items (non-cash)	4	32	(28)
Working capital	(97)	(26)	(71)
Movement on provisions	(35)	(26)	(9)
Capex - additions	(105)	(102)	(3)
Capex - disposals	1	2	(1)
Capital of lease payments and initial direct costs incurred	(72)	(81)	9
Interest	(104)	(114)	10
Tax	(31)	(58)	27
Free Cash Flow	172	229	(57)
Acquisitions	(76)	(175)	99
Dividends	(149)	(131)	(18)
Cash impact of one-off and adjusting items	(41)	(78)	37
Other	-	(1)	1
Debt related cash flows:
Cash outflow on settlement of debt related foreign exchange forward contracts	(6)	(3)	(3)
Debt repayments	(4)	-	(4)
Debt related cash flows	(10)	(3)	(7)

Net decrease in cash and cash equivalents	(104)	(159)	55
Cash and cash equivalents at the beginning of the year	832	879	(47)
Exchange losses on cash and cash equivalents	(12)	(22)	10
Cash and cash equivalents at end of the financial period	716	698	18

Net decrease in cash and cash equivalents	(104)	(159)	55
Debt related cash flows	10	3	7
IFRS 16 liability movement	(1)	(7)	6
Debt acquired	(4)	18	(22)
Bond interest accrual	35	35	-
Foreign exchange translation and other items	(12)	136	(148)
(Increase)/decrease in net debt	(76)	26	(102)
Opening net debt	(3,146)	(3,296)	150
Closing net debt	(3,222)	(3,270)	48

	Note	Unaudited 6 months to 30 June 2024 £m	Unaudited 6 months to 30 June 2023 £m
Revenue	4	2,706	2,671
Operating expenses		(2,360)	(2,354)
Net impairment losses on financial assets		(25)	(13)
Operating profit		321	304
Finance income		24	17
Finance cost		(96)	(88)
Share of profit from associates net of tax		4	7
Profit before income tax		253	240
Income tax expense1	5	(57)	(55)
Profit for the period		196	185
Profit for the period attributable to:
Equity holders of the Company		196	185
Non-controlling interests		-	-
Other comprehensive income:
Items that may be reclassified subsequently to the income statement:
Net exchange adjustments offset in reserves		21	(341)
Net (loss)/gain on net investment hedge		(8)	49
Effective portion of changes in fair value of cash flow hedge		5	49
Cost of hedging		(2)	17
Tax related to items taken to other comprehensive income		2	2
Other comprehensive income for the period		18	(224)
Total comprehensive income for the period		214	(39)
Total comprehensive income for the period attributable to:
Equity holders of the Company		214	(39)
Non-controlling interests		-	-

Earnings per share attributable to the Company's equity holders:
Basic	7.78p	7.35p
Diluted	7.75p	7.31p

	Note	Unaudited At 30 June 2024 £m	Audited At 31 December 2023 £m
Assets
Non-current assets
Intangible assets		7,128	7,042
Property, plant and equipment		502	499
Right-of-use assets		457	452
Investments in associated undertakings		43	44
Other investments		21	21
Deferred tax assets	5	48	43
Contract costs		229	224
Retirement benefit assets		7	3
Trade and other receivables		49	45
Derivative financial instruments	10	18	57
		8,502	8,430
Current assets
Other investments		1	1
Inventories		204	207
Trade and other receivables		949	880
Current tax assets	5	9	33
Derivative financial instruments	10	10	14
Cash and cash equivalents		1,557	1,562
		2,730	2,697
Liabilities
Current liabilities
Trade and other payables		(1,145)	(1,144)
Current tax liabilities	5	(46)	(48)
Provisions for liabilities and charges	12	(68)	(94)
Bank and other short-term borrowings		(1,199)	(1,134)
Lease liabilities		(133)	(127)
Derivative financial instruments	10	(36)	(32)
		(2,627)	(2,579)
Net current assets		103	118
Non-current liabilities
Other payables		(82)	(71)
Bank and other long-term borrowings		(3,104)	(3,153)
Lease liabilities		(315)	(318)
Deferred tax liabilities	5	(534)	(517)
Retirement benefit obligations		(29)	(28)
Provisions for liabilities and charges	12	(357)	(357)
Derivative financial instruments	10	(21)	(16)

Principal risk	Summary of risk
Failure to integrate acquisitions and execute disposals from continuing business	The Group has a strategy that includes growth by acquisition, and has acquired 23 businesses in H1 2024. These companies need to be integrated quickly and efficiently to minimise potential impact on the acquired business and the existing business.
Failure to develop products and services that are tailored and relevant to local markets and market conditions	The Group operates across markets that are at different stages in the economic cycle, at varying stages of market development and have different levels of market attractiveness. We must be sufficiently agile to develop and deliver products and services that meet local market needs which allows us to meet our growth objectives and stay ahead in a highly competitive industry.
Failure to grow our business profitably in a changing macro-economic environment	The Group's two core categories (Pest Control and Hygiene & Wellbeing) operate in a global macro-economic environment that is subject to uncertainty and volatility.
Failure to mitigate against financial market risks	Our business is exposed to foreign exchange risk, interest rate risk, liquidity risk, counterparty risk and settlement risk.
Breaches of laws or regulations (including tax, competition and anti-trust laws)	As a responsible company we aim to comply with all laws and regulations that apply to our businesses across the globe.
Failure to ensure business continuity in case of a material incident	The Group needs to have resilience to ensure business can continue if impacted by external events, e.g. cyber attack, hurricane or terrorism.
Fraud, financial crime and loss or unintended release of personal data	Collusion between individuals, both internal and external, could result in fraud if internal controls are not in place and working effectively. The business holds personal data on colleagues, some customers and suppliers; unintended loss or release of such data may result in sanctions, fines and reputational risk.
Safety, health and the environment (SHE)	The Group has an obligation to ensure that colleagues, customers and other stakeholders remain safe, that the working environment is not detrimental to health and that we are aware of, and minimise, any adverse impact on the environment.
Failure to deliver consistently high levels of service to the satisfaction of our customers	Our business model depends on servicing the needs of our customers in line with internal high standards and to levels agreed in contracts.

●	Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants - Amendments to IAS 1
●	Lease liability in sale and leaseback - Amendments to IFRS 16
●	Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7.

	6 months to 30 June 2024 £m	6 months to 30 June 2023 £m
At 1 January	(474)	(468)
Exchange differences	(1)	24
Acquisition of companies and businesses	(8)	(7)
(Charged) to the income statement	(1)	(11)
(Charged)/credited to other comprehensive income	(1)	1
(Charged)/credited to equity	(1)	4
At 30 June	(486)	(457)
Deferred taxation has been presented on the balance sheet as follows:
Deferred tax asset within non-current assets	48	46
Deferred tax liability within non-current liabilities	(534)	(503)
	(486)	(457)

	Attributable to equity holders of the Company
	Sharecapital£m	Sharepremium£m	Otherreserves£m	Retainedearnings£m	Non-controllinginterests£m	Totalequity£m
At 1 January 2023	25	9	763	3,302	(1)	4,098
Profit for the period	-	-	-	185	-	185
Other comprehensive income:
Net exchange adjustments offset in reserves	-	-	(341)	-	-	(341)
Net gain on net investment hedge	-	-	49	-	-	49
Net gain on cash flow hedge1	-	-	49	-	-	49
Cost of hedging	-	-	17	-	-	17
Tax related to items taken directly to other comprehensive income	-	-	-	2	-	2
Total comprehensive income for the period	-	-	(226)	187	-	(39)
Transactions with owners:
Gain on stock options	-	3	-	-	-	3
Dividends paid to equity shareholders	-	-	-	(131)	-	(131)
Cost of equity-settled share-based payment plans	-	-	-	14	-	14
Tax related to items taken directly to equity	-	-	-	4	-	4
Movement in the carrying value of put options	-	-	-	3	-	3
At 30 June 2023 (unaudited)	25	12	537	3,379	(1)	3,952
At 1 January 2024	25	14	532	3,518	(1)	4,088
Profit for the period	-	-	-	196	-	196
Other comprehensive income:
Net exchange adjustments offset in reserves	-	-	21	-	-	21
Net loss on net investment hedge	-	-	(8)	-	-	(8)
Net gain on cash flow hedge1	-	-	5	-	-	5
Cost of hedging	-	-	(2)	-	-	(2)
Tax related to items taken directly to other comprehensive income	-	-	-	2	-	2
Total comprehensive income for the period	-	-	16	198	-	214
Transactions with owners:
Dividends paid to equity shareholders	-	-	-	(149)	-	(149)
Cost of equity-settled share-based payment plans	-	-	-	11	-	11
Tax related to items taken directly to equity	-	-	-	(1)	-	(1)
At 30 June 2024 (unaudited)	25	14	548	3,577	(1)	4,163

	Capitalreductionreserve£m	Mergerreliefreserve£m	Cash flowhedgereserve£m	Translationreserve£m	Cost ofhedging£m	Total£m
At 1 January 2023	(1,723)	2,998	3	(511)	(4)	763
Net exchange adjustments offset in reserves	-	-	-	(341)	-	(341)
Net gain on net investment hedge	-	-	-	49	-	49
Net gain on cash flow hedge1	-	-	49	-	-	49
Cost of hedging	-	-	-	-	17	17
Total comprehensive income for the period	-	-	49	(292)	17	(226)
At 30 June 2023 (unaudited)	(1,723)	2,998	52	(803)	13	537
At 1 January 2024	(1,723)	2,998	6	(754)	5	532
Net exchange adjustments offset in reserves	-	-	-	21	-	21
Net loss on net investment hedge	-	-	-	(8)	-	(8)
Net gain on cash flow hedge1	-	-	5	-	-	5
Cost of hedging	-	-	-	-	(2)	(2)
Total comprehensive income for the period	-	-	5	13	(2)	16
At 30 June 2024 (unaudited)	(1,723)	2,998	11	(741)	3	548

	Revenue 30 June 2024 £m	Revenue 30 June 2023 £m	Operating profit 30 June 2024 £m	Operating profit 30 June 2023 £m
North America
Pest Control	1,585	1,609	295	302
Hygiene & Wellbeing	47	45	9	4
	1,632	1,654	304	306
Europe (incl LATAM)
Pest Control	264	252	60	57
Hygiene & Wellbeing	173	169	24	22
France Workwear	114	108	20	18
	551	529	104	97
UK & Sub-Saharan Africa
Pest Control	101	97	26	26
Hygiene & Wellbeing	112	93	23	20
	213	190	49	46
Asia & MENAT
Pest Control	128	123	17	18
Hygiene & Wellbeing	44	45	5	5
	172	168	22	23
Pacific
Pest Control	68	63	12	12
Hygiene & Wellbeing	64	62	17	17
	132	125	29	29
Central and regional overheads	6	5	(61)	(58)
Restructuring costs	-	-	(2)	(6)
Revenue and Adjusted Operating Profit	2,706	2,671	445	437
One-off and adjusting items			(37)	(46)
Amortisation and impairment of intangible assets1			(87)	(87)
Operating profit			321	304

	30 June 2024 £m	30 June 2023 £m
Recognised over time
Contract service revenue	1,945	1,918
Recognised at a point in time
Job work	562	541
Sales of goods	199	212
Total	2,706	2,671

	6 months to 30 June 2024 £m	6 months to 30 June 2023 £m
UK corporation tax at 25% (2023: 23.5%)	4	2
Overseas taxation	46	44
Adjustment in respect of previous periods	6	(2)
Total current tax	56	44
Deferred tax expense	8	13
Adjustment in respect of previous periods	(7)	(2)
Total deferred tax	1	11
Total income tax expense	57	55

	6 months to 30 June 2024 £m	6 months to 30 June 2023 £m
2022 final dividend paid - 5.15p per share	-	131
2023 final dividend paid - 5.93p per share	149	-
Total	149	131

	6 months to 30 June 2024 £m	6 months to 30 June 2023 £m
Purchase consideration
- Cash paid	58	161
- Deferred and contingent consideration	54	41
Total purchase consideration	112	202
Fair value of net assets acquired	40	58
Goodwill from current-period acquisitions	72	144

	At 30 June 2024 £m	At 31 December 2023 £m
Current
Cash and cash equivalents in the Consolidated Balance Sheet	1,557	1,562
Other investments	1	1
Fair value of debt-related derivatives	(26)	(18)
Bank and other short-term borrowings¹	(1,199)	(1,134)
Lease liabilities	(133)	(127)
	200	284
Non-current
Fair value of debt-related derivatives	(3)	41
Bank and other long-term borrowings²	(3,104)	(3,153)
Lease liabilities	(315)	(318)
	(3,422)	(3,430)
Total net debt	(3,222)	(3,146)

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 WACC

	Fair value assets 30 June 202 4£m	Fair value assets 31 December 2023 £m	Fair value liabilities 30 June 2024 £m	Fair value liabilities 31 December 2023 £m
Interest rate swaps (level 2):
- non-hedge	-	-	(1)	(1)
- cash flow hedge	2	37	(45)	(27)
- net investment hedge	42	24	(28)	(11)
Foreign exchange swaps (level 2):
- non-hedge	1	1	-	-
	45	62	(74)	(39)
Analysed as follows:
Current portion	6	5	(32)	(23)
Non-current portion	39	57	(42)	(16)
Derivative financial instruments	45	62	(74)	(39)

Contingent consideration (including put option liability) (level 3)1			(85)	(76)
Analysed as follows:
Current portion			(40)	(36)
Non-current portion			(45)	(40)
Other payables (non-current)			(85)	(76)

	Contingent consideration 30 June 2024 £m	Contingent consideration 30 June 2023 £m
At 1 January	76	70
Exchange differences	(1)	(2)
Acquisitions	25	33
Payments	(15)	(15)
Revaluation of put option through equity	-	(3)
	85	83

	Facility amountat 30 June 2024 £m	Drawn at period end at 30 June 2024 £m	Headroom at 30 June 2024 £m	Interest rate at period end at 30 June 2024 %
Non-current
$700m term loan due October 2025	554	554	-	5.94
$1.0bn RCF due October 2028	791	-	791	0.14

	Facility amount at 31 December 2023 £m	Drawn at period end at 31 December 2023 £m	Headroom at 31 December 2023 £m	Interest rate at period end at 31 December 2023 %
Non-current
$700m term loan due October 2025	550	550	-	5.94
$1.0bn RCF due October 2028	785	-	785	0.14

	Bond interest coupon 2024	Effective hedged interest rate 2024
Current
€400m bond due November 2024	Fixed 0.950%	Fixed 3.02%
Non-current
€500m bond due May 2026	Fixed 0.875%	Fixed 2.71%
€850m bond due June 2027	Fixed 3.875%	Fixed 4.94%
€600m bond due October 2028	Fixed 0.500%	Fixed 2.16%
€600m bond due June 2030	Fixed 4.375%	Fixed 4.50%
£400m bond due June 2032	Fixed 5.000%	Fixed 5.21%
Average cost of bond debt at period-end rates		3.85%

	Termite damage claims £m	Selfinsurance £m	Environmental £m	Other £m	Total £m
At 31 December 2023	260	164	16	11	451

At 1 January 2024	260	164	16	11	451
Exchange differences	2	-	-	-	2
Additional provisions	3	34	1	3	41
Used during the period	(33)	(30)	(1)	(4)	(68)
Unused amounts reversed	(3)	-	(1)	(1)	(5)
Unwinding of discount on provisions	4	-	-	-	4
At 30 June 2024	233	168	15	9	425

	At 30 June 2024 Total £m	At 31 December 2023 Total £m
Analysed as follows:
Non-current	357	357
Current	68	94
Total	425	451

●	Discount rate - The exposure to termite damage claims is largely based within the United States, therefore measurement is based on a seven-year US bond risk-free rate. During 2024, interest rates (and therefore discount rates) have moved up and are close to their highest level in over a decade. Rates could move in either direction and management has modelled that an increase/decrease of 5% in yields (would decrease/increase the provision by £2m (2023: £3m). Over the 6 months to 30 June 2024, seven-year risk-free rate yields have increased c.14% from 3.88% to 4.42%.
●	Claim value - Claim value forecasts have been based on the latest available historical settled Terminix claims. Claims values are dependent on a range of inputs including labour cost, materials costs (e.g. timber), whether a claim becomes litigated or not, and specific circumstances including contributory factors at the premises. Management has determined the historical time period for each material category of claim, between three months and one year, to determine an estimate for costs per claim. Recent fluctuations in input prices (e.g. timber prices) 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 claim values would increase/decrease the provision by c.£9m (2023: £15m). Over the 6 months to 30 June 2024, as a result of accelerating the clear down of legacy longstanding claims and other macroeconomic factors, in-year costs per claim rose by c.11% (2023: 32%).
●	Claim rate - Management has estimated claim rates based on statistical historical incurred claims. Data has been captured and analysed by a third-party agency, 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 overall claim rates would increase/decrease the provision by c.£10m (2023: £15m), accordingly. Over the 6 months to 30 June 2024, claim rates fell by c.20% (2023: 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 by a third-party agency, 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 to the performance of the Group. A 1% movement in customer churn rates, up or down, would change the provision by c.£8m up or down (2023: £11m), accordingly. On average over the last 10 years to December 2023 churn rates have moved by +/- c.1.8% per annum.

	NorthAmerica £m	Europe (incl.LATAM) £m	UK &Sub-Saharan Africa £m	Asia & MENAT £m	Pacific £m	Central and regional £m	Total £m
2023 Revenue	1,654	529	190	168	125	5	2,671
2023 Exchange differences	(11)	(4)	(1)	(3)	(2)	-	(21)
2023 Revenue (at 2023 CER)	1,643	525	189	165	123	5	2,650
2023 Revenue from closed business1	(14)	-	-	-	-	-	(14)
Normalised 2023 Revenue (at 2023 CER) - base for Organic Revenue Growth percentage	1,629	525	189	165	123	5	2,636
Revenue from 2024 acquisitions (at 2023 CER)²	1	2	10	3	1	-	17
Revenue from 2023 acquisitions (at 2023 CER)³	11	4	5	2	7	-	29
Organic Revenue Growth 2024 (at 2023 CER)4	21	31	9	8	4	1	74
2024 Exchange differences	(30)	(11)	-	(6)	(3)	-	(50)
2024 Revenue (at AER)	1,632	551	213	172	132	6	2,706
Organic Revenue Growth %	1.3%	5.8%	5.1%	4.7%	4.1%	8.0%	2.8%

6 months to 30 June 2024
	IFRS measures £m	Net interest adjustments £m	One-off and adjusting items £m	Amortisation and impairment ofintangibles1 £m	Non-IFRS measures £m
Profit before income tax	253	6	37	87	383	Adjusted Profit Before Tax
Income tax expense	(57)	(1)	(10)	(22)	(90)	Tax on Adjusted Profit
Profit for the period	196	5	27	65	293	Adjusted Profit After Tax