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Rentokil Initial Plc - Final Results

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Rentokil Initial Plc 

Final Results

Excellent progress in 2019: 4.5% FY Organic Revenue growth our highest level in 15 years

 

Results 

FY 2019

Growth

£m

AER

AER

CER

 

 

 

 

Ongoing Revenue

2,676.2

9.9%

8.6%

Revenue

2,714.4

9.8%

8.5%

Ongoing Operating Profit

368.1

11.3%

10.5%

Operating Profit

365.4

11.0%

10.2%

Adjusted profit before tax

340.9

10.7%

9.8%

Profit before tax

338.5

-

-

Free Cash Flow

250.7

 

 

Adjusted EPS

14.43p

10.4%

9.2%

EPS

15.33p

-

-

Dividend per share

5.15p

15.2%

 

2019 Highlights

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Revenue, profit and cash in excess of medium-term targets : Ongoing Revenue up 8.6%, Organic Revenue up 4.5%, Ongoing Operating Profit up 10.5% and Free Cash Flow conversion of 98.6%

?

10.8% Ongoing Revenue growth in Pest Control (4.9% Organic), driven by strong innovation and digital performance

?

5.8% Ongoing Revenue growth in Hygiene (4.3% Organic), reflecting very good results in UK, Europe and Pacific and ongoing contributions from acquisitions

?

3.5% Ongoing Revenue growth in Protect & Enhance (3.2% Organic), due to improved performance from France Workwear, Ambius and UK Property Care

?

20 basis points improvement in Group Net Operating Margin at 13.8%, 50 basis points improvement in North America margins at 14.2%

?

Free Cash Flow of £250.7m, a £58.7m increase on the prior year and representing 98.6% conversion

?

30 bps improvement in customer retention at 86.2%, (50 basis points improvement in Pest Control at 84.7%), 3.7% improvement in colleague retention at 86.9% 

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Excellent year for M&A:

 

41 businesses acquired - 30 Pest Control, 8 Hygiene, 3 Protect & Enhance - principally in Growth and Emerging markets.  Combined annualised revenues of £137m for total cash spend of £316.5m

 

14 Pest Control and two Ambius acquisitions in North America with c.$135m (c.£101m) annualised revenues, including Florida Pest Control, a top 20 pest business with annualised revenues of c.$66m (c.£50m)

 

Divestment of 17.8% interest in CWS-boco International GmbH to Haniel on 30 July for cash consideration of €430m

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Recommended final dividend of 3.64p to bring total dividend for 2019 to 5.15p, an increase of 15.2% 

Commenting on the results, Andy Ransom, CEO of Rentokil Initial plc, said:

"The Company performed strongly in 2019 with a combination of above-target Organic growth and disciplined execution of M&A.  Organic growth was driven by our increasing presence in growth markets, higher levels of customer retention and a strong innovation programme. In particular, our employer of choice programme continues to deliver outstanding results with increased levels of safety, training, motivation and retention of our colleagues.

"Looking forward into the new decade, key demographic trends such as urbanisation will enlarge our global pest control and hygiene markets, while we continue to focus on the relentless execution of our plan.  We are confident of delivering further operational and financial progress in 2020."