Rentokil Initial PLC 6-K, filed Apr 18, 2024
Rentokil Initial PLC (RTO)
6-K
2024-04-18
For: 2024-04-18
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Added on
April 11, 2026
About this 6-K
Rentokil Initial PLC filed this 6-K on April 18, 2024.
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 April 2024
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): ☐
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Q1
Trading Update dated 18 April 2024
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18 April 2024
RENTOKIL INITIAL PLC
FIRST QUARTER TRADING UPDATE
POSITIVE OVERALL START
Rentokil Initial plc ("the Group"), today issues a Trading Update
for the first three months of the 2024 financial year covering the
period 1 January 2024 to 31 March 2024.
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AER1
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CER
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||||
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Q1 2024
£m
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Q1 2023
£m
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Change
%
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Q1 2024
£m
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Q1 2023
£m
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Change
%
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Revenue
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1,270
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1,259
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0.9%
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1,294
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1,233
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4.9%
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Unless otherwise stated, figures related to the first quarter and
are stated at constant exchange rates.
Andy Ransom, Chief Executive of Rentokil Initial plc,
said:
"We have made a positive overall start to 2024. The Group has
performed well and our RIGHT WAY 2 plan has delivered a stabilising
performance in North America. With the key trading period for the
business ahead of us, we remain confident in delivering on our
guidance of 2-4% Organic Revenue growth in the region.
"As the year proceeds, we look forward to continued progress,
driven by our focus on North America growth and the Terminix
integration plan, which is in the advanced stages of preparation
for the first full branch integrations commencing
mid-year."
● Group Revenue up 4.9%, of which 3.1% was
Organic Revenue growth. Continued pricing
momentum.
● North America growth performance has
stabilised with Organic Revenue up 1.5%. Early initiatives of RIGHT
WAY 2 growth plan underway.
- Organic
Revenue in Pest Control overall up 1.5% and Pest Control services
for commercial, residential and termite customers up
1.0%.
- Inbound
digital lead flow performance was similar to Q4, with an
improvement in lead quality, which had a positive impact on our
sales conversion and return on marketing spend. We are encouraged
by increased lead flows in the first two weeks of
April.
- Technician
sales leads participation rates improved by 8ppts from February to
March.
- Customer
retention was stable at 79.5%, and our pricing activities were
successful in passing cost inflation to our
customers.
- North
America colleague retention increased further to 76.7% (31
December 2023: 75.2%), with the largest improvement in sales
colleague roles (up 2.7ppts to 69.1%). We launched a new
compensation plan for our new Terminix sales colleagues to support
the continued improvement in sales colleague
retention.
- New
'Terminix It' multi-channel advertising and marketing campaign
launched in late Q1 to build brand awareness and preference with
key customer segments, and set to ramp up in the peak
season.
● Good momentum in Organic Revenue growth was
sustained in all other regions: +6.2% in Europe inc. LATAM, the
Group's second largest region; +4.1% in UK & Sub Saharan
Africa; +4.3% in Asia & MENAT; and +7.3% in
Pacific.
● Organic Revenue growth across all
categories: Pest Control up 2.7%, Hygiene & Wellbeing up 3.8%,
and France Workwear up 7.7%.
● Terminix integration plan saw further
progress towards full branch integration starting
mid-year.
- Completion
of the merger of the Rentokil and Terminix legal entities into
Rentokil North America, Inc. with all employees, customers and
suppliers now contracted to the same legal entity. The legal
combination is a critical enabler of future integration activities,
which will allow for shared use of resources and the harmonisation
of operating standards and pay plans.
- Go
live of the new combined general ledger and internal reporting
systems, facilitating integrated performance management, and
continued progress on the development of the operational technology
stack.
● The Group's bolt-on M&A programme
continued to create value with 8 deals, delivering annualised
revenue in the year before acquisition of £45m. This includes
the acquisition of HiCare Services Private Limited, the second
largest pest control company in India. We remain confident in our
targeted spend of c.£250m in 2024.
● The Group is on track to deliver on
expectations for FY 2024, including 2-4% Organic Revenue growth in
North America, accompanied by modest margin progression, which we
continue to expect to be weighted towards H2.
Summary of financial performance (at CER)
Regional Performance
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Revenue
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Organic Revenue growth
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Q1 2024 £m
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Q1 2023 £m
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Change
%
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Q1
2024
%
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North America
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761
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743
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2.3
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1.5
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Pest Control
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739
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721
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2.4
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1.5
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Hygiene & Wellbeing
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22
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22
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0.8
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0.6
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Europe (inc LATAM)
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274
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256
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7.4
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6.2
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Pest Control
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130
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120
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8.6
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6.5
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Hygiene & Wellbeing
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87
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83
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5.5
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4.7
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France Workwear
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57
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53
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7.7
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7.7
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UK & Sub Saharan Africa
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103
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92
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12.3
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4.1
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Pest Control
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50
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48
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4.1
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4.1
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Hygiene & Wellbeing
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53
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44
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21.2
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4.1
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Asia & MENAT
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86
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81
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5.7
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4.3
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Pest Control
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63
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59
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6.7
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5.4
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Hygiene & Wellbeing
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23
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22
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3.2
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1.4
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Pacific
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67
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58
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14.4
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7.3
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Pest Control
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34
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28
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20.1
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9.9
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Hygiene & Wellbeing
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33
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30
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9.1
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5.0
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Central
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3
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3
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(0.3)
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(0.3)
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Total at CER
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1,294
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1,233
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4.9
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3.1
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Total at AER
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1,270
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1,259
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0.9
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Category Performance
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Revenue
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Organic Revenue growth
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Q1 2024 £m
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Q1 2023 £m
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Change
%
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Q1
2024
%
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Pest Control
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1,016
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976
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4.0
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2.7
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Hygiene & Wellbeing
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218
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201
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8.7
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3.8
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France Workwear
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57
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53
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7.7
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7.7
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Central
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3
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3
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(0.3)
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(0.3)
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Total at CER
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1,294
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1,233
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4.9
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3.1
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Total at AER
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1,270
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1,259
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0.9
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The Company will host a webcast and teleconference at 9:30 a.m. BST
to discuss the results. The audio webcast and accompanying
presentation materials will be accessible via the IR section of the
Company's website (www.rentokil-initial.com/investors). To ask
questions, please join via the teleconference with conference ID
1097846 on one of the dial-in options below, with additional
international access numbers found at
https://registrations.events/directory/international/itfs.html. A
replay will be available on the Company website after the
call.
UK: +44 20 3481 4247
USA: +1 (646) 307 1963
Rentokil Initial intends to publish its 2024 Interim Results on 25
July 2024.
Enquiries:
Investors / Analysts: Peter Russell, Rentokil Initial plc, + 44
7795 166506
Media: Malcolm Padley, Rentokil Initial plc, +44 7788
978199
Notes
1AER -
actual exchange rates; CER - constant 2023 exchange
rates
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; the
availability of a suitably skilled and qualified labour force to
maintain the Group's business; the Group's ability to attract,
retain and develop key personnel to lead the business; 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; inflationary pressures, such as increases in
wages, fuel prices and other operating costs; supply chain issues,
which may result in product shortages or other disruptions to the
Group's business; 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;
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 its third-party service providers;
extraordinary events that impact the Group's ability to service
customers without interruption, including a loss of its third-party
distributors; 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 or litigation; 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; 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; 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; 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 our 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.
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 announcement is intended to be a profit
forecast and no statement in this announcement 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 further 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. These include revenue and measures presented at actual
exchange rates ("AER" - IFRS) and constant full year
2023 exchange rates ("CER" - Non-IFRS). Non-IFRS measures
presented also include Organic Revenue. Definitions for these
measures can be found in the Group's 2023 Annual Report on Page
63. 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:
18 April 2024
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RENTOKIL INITIAL PLC
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/s/
Catherine Stead
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Name:
Catherine Stead
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Title:
Company Secretary
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