Rentokil interim profit hit by Covid-19 closures
By Michele Maatouk
Date: Thursday 30 Jul 2020
(Sharecast News) - Pest control and hygiene services company Rentokil posted a decline in interim profit on Thursday as it took a hit from the temporary closure of some businesses due to the coronavirus lockdown.
First-half adjusted pre-tax profit fell 11.3% to £125.6m on revenue of £1.3bn, up 0.5% from the same period a year ago. Adjusted earnings per share dropped 11.5% to 5.30p.
Rentokil said its UK and rest of the world region was "significantly" impacted by the Covid-19 crisis, namely the UK and Ireland washrooms businesses, which were unable to service customers in many sectors, but primarily the hotel, restaurant and catering sector.
On the upside, however, the company's specialist hygiene, medical hygiene and products businesses performed well over the half, benefiting from increased disinfection services.
The UK pest control division saw declines in both quarters amid temporary business closures and suspensions.
No interim dividend was declared but Rentokil said it would expect to propose a dividend for 2020 if trading continues in line with its expectations in the second half.
Chief executive officer Andy Ransom said: "While the Covid-19 pandemic is far from over and our thoughts remain with everyone affected, at Rentokil Initial we have moved from the crisis phase into the recovery phase. The majority of our colleagues are now back at work, we have repaid the Bank of England's Covid Corporate Financing Facility and our own revolving credit facility, and we have resumed our M&A programme.
"Our hygiene business, which was more impacted by customer shutdowns, has moved from being considered a low interest (but nonetheless required service) to arguably one of the world's most important business categories. We are now expanding our hygiene category into new countries as well as launching additional services."
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