Rentokil profits boosted by US expansion and Terminix takeover

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Rentokil Initial said its pre-tax profits skyrocketed by around two-thirds to £493 million in 2023, primarily thanks to its $6.7billion acquisition of US-based pest control brand Terminix.

Finalised in October 2022, the takeover made Rentokil the world’s largest provider of pest control services and helped its overall turnover increase by 45.8% to £5.4 billion last year.

Trade was additionally boosted by solid organic revenue growth across all business categories, with its France Workwear divisions achieving a 13.2% rise and its hygiene and wellbeing operation seeing a 5.4% increase.

Rentokil said sales in the latter segment were boosted by high demand from shops, offices, schools and hospitality businesses, which contributed to offset falling revenues from Covid-related disinfection services.

Meanwhile, the group benefited from an improved result in its UK property care business.

Andy Ransom, Rentokil’s chief executive, said the firm “delivered a good operational and financial performance,” supported by a “diversified, global footprint and resilient business model”.

He added: “We have made strong progress in the integration of Terminix to create a powerhouse business in the world’s largest pest control market.”

Rentokil said it anticipates making about $325m in annual gross pre-tax synergies from amalgamating Terminix by 2026, $50m greater than previously expected.

The group completed 40 other acquisitions during 2023 and forecasts spending around another £250m on takeover deals this year.

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With more than 25 years' experience in business-to-business publishing, Simon is editor of LBM titles Pest and OvertheCounter. Big fan of Manchester United.