Rentokil: Slow US growth continues to hold pest control giant back
Pest control giant Rentokil has reported an uptick in revenue despite continued slow growth in North America.
Organic revenue grew 3.3 per cent to $1.63bn (£1.23bn) in the three months to March 31, driven by growth in Europe and Asia.
The Crawley-based company, which is listed in London and operates across 80 different countries, said revenue growth in North America was 0.5 per cent.
Rentokil acquired major US pest control company Terminix back in October 2022, but has struggled to grow the business since.
This was be the sixth consecutive quarter of 1.5 per cent or less organic revenue growth, at a time when the market has been growing by four to five per cent and leading competitor Rollins to seven to eight per cent.
North America accounted for 60 per cent of the company’s revenue last year.
The company only returned to growth last October, following a £80m hit its operating profit after expanding its US workforce to meet peak season demand, which fell short of expectations.
“North America had a slow first quarter with continued subdued lead flow,” Andy Ransom, Chief Executive of Rentokil Initial plc, said.
“Our focus remains on building growth momentum and positioning the business to deliver on our strategic ambitions.
“Despite increased macro-economic uncertainties, we remain confident about the longer-term based on the resilience of our markets, our global reach, our diverse customer base and our recurring revenues,” Ramsom added.
Peel Hunt downgraded its outlook for Rentokil in March due to weak growth in North America, and rated the shares a ‘Hold’.
Rentokil’s share price has fallen by 1.2 per cent in the past month and more than 25 per cent in the last year.