(Sharecast News) – Rentokil International said annual results would be slightly better than expectations but warned the outlook was uncertain because of uncertainty over one-off disinfection sales.
The FTSE 100 company said fourth-quarter trading was strong at its pest control and hygiene divisions, mainly because of high demand for one-off disinfections during the Covid-19 crisis.
“We now expect the final outcome for the year to be slightly above the top end of the range of current market expectations for adjusted PBTA [profit before tax and amortisation],” Rentokil said. The current analyst consensus is for PBTA between £292m and £337m.
Rentokil said it had a limited view of how demand would hold up for disinfection services. It also said the pound’s recent rise, surging Covid-19 infections and country lockdowns clouded the outlook.
The company said it had bought Environmental Pest Service (EPS), a commercial and residential pest control company based in Tampa, Florida, for an undisclosed price. EPS has annualised revenue of about $82m (£60m).
Rentokil said it bought eight pest control companies in North America during the fourth quarter with $62m of annualised revenue. The company spent £180m on 23 businesses in the year to the end of December with £150m spent in the second half. The figures exclude EPS which Rentokil paid for at the start of 2021.
Andy Ransom, Rentokil’s chief executive, said: “Despite the impact of Covid-19 on our business in 2020, we have exited the year in a strong position, with the trading momentum of Q3 continuing throughout Q4 and with an excellent overall delivery of M&A, which significantly accelerated as the year drew to a close.”
