Rentokil Initial unveils rise in profits despite City Link loss

Pest control and hygiene giant Rentokil Initial revealed robust 2012 results on Friday, beating analyst expectations.

Pest control and hygiene giant Rentokil Initial revealed robust 2012 results on Friday, beating analyst expectations.

Adjusted pre-tax profits came to £191m, a 10.1% year-on-year rise, driven in part by £59m of cost savings following a restructuring of the company's textiles and hygiene arm in France and its pest control division across a number of countries.

However, its parcel delivery arm, City Link, took the spotlight away from an otherwise strong year, as it posted a $26.4m operating loss. The division has weighed on the firm since 2007 due to high operating costs and a competitive market.

Nevertheless, Rentokil's total sales grew 2.8% at constant exchange rates to £2.55bn.

The company reported particularly stellar results in the last quarter of the year with profit up 15.9% as it performed well in Asian markets including Malaysia, China and India.

During the year, Rentokil expanded its pest control operations through the acquisition of Western Exterminator and bolt-ons in North, Central and South America and the Middle East.

Chief Executive Officer Alan Brown said Rentokil finished the year on a high note as the organisation has matured over the past two years.

"While we remain mindful of continuing tough conditions across many of our markets, the operational changes we made during the year, together with the acquisition of Western Exterminator in December, give us confidence

that 2013 will see us sustain the momentum we achieved in the final quarter of 2012," he said.

The group increased its final dividend by 7.5% to 1.43p, taking the full-year total to 2.10p.

Shares rose 10.06% to 99.60p at 09:21 Friday.

RD

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020