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Rentokil Initial to top profit forecasts as one-off disinfection services are in demand

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Rentokil Initial PLC (LON:RTO) said it expects to top profit forecasts thanks to strong sales in its hygiene and pest control categories, driven by high demand for one-off disinfection services.

Full-year adjusted profit before tax is estimated to come in slightly above the current market expectations of £292mln-£337mln, the group said.

READ: Rentokil Initial plans intense acquisition activity in months ahead

However, the FTSE 100 firm said the financial outlook for 2021 inevitably remains uncertain, with limited visibility on the sustainability of one-off disinfection services, the recent strengthening of sterling, and the undetermined impacts arising from recently rising cases of coronavirus (COVID-19) globally and new and prolonged country lockdowns.

The cleaning products manufacturer also announced the acquisition of Environmental Pest Service, a full-service, commercial and residential pest control company based in Florida.

The company employs 640 people in 30 branches across four separate regions and generated annualised revenues of US$82mln last year.

In the fourth quarter to December 2020, Rentokil acquired another eight pest control companies in North America, with combined annualised revenues of US$62mln.

For the full year ended December 31, 2020, the group noted that it acquired 23 new businesses, with annualised revenues of over £150mln, for a cash spend of £180mln – which excludes the consideration for Environmental Pest Service which was paid at the beginning of January.

M&S, Barratt and US jobs report on the agenda for Friday

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