Rentokil Initial PLC Q3 Interim Management Statement (4101W)
November 07 2014 - 2:00AM
UK Regulatory
TIDMRTO
RNS Number : 4101W
Rentokil Initial PLC
07 November 2014
RENTOKIL INITIAL PLC (RTO)
INTERIM MANAGEMENT STATEMENT
7 November 2014
(GBPm) Q3 2014 Growth YTD 2014 Growth
AER AER CER AER AER CER
Revenue 439.5 (3.4%) 3.3% 1,293.9 (4.1%) 2.1%
Revenue - ongoing operations(1) 439.5 (2.9%) 3.8% 1,293.0 (3.2%) 3.1%
Adjusted operating
profit(2) 62.6 (4.1%) 4.0% 162.8 (1.9%) 6.2%
Adjusted profit before
tax(2) 53.5 5.7% 15.4% 131.0 3.6% 14.1%
Profit before tax 48.8 16.7% 27.0% 115.6 28.4% 42.0%
--------------------------------- -------- ------- ------ --------- ------- ------
Revenue (at CER)
Overall, revenue from ongoing operations increased by 3.8% in Q3
in line with Q2. Revenue grew organically by 1.1% and by 2.7% from
businesses acquired in the last 12 months. Growth in Q3 in the
Emerging (22.4%) and Growth (6.1%) quadrants was strong, partially
offset by slight declines in the Protect and Enhance (-0.1%) and
Manage for Value (-0.8%) quadrants. Divestments in the Manage for
Value quadrant of our Belgian Flat Linen business and our Korean JV
in 2013, and our Spanish Medical business in H1 2014, reduced
revenue growth by 0.5% in Q3, resulting in total revenue growth in
the quarter of 3.3%.
Profit (at CER)
Adjusted operating profit increased by 4.0% in Q3, reflecting
growth in North America, Pacific and Germany, as well as lower
overheads, partly offset by lower profits in Benelux and slower
growth in France.
Adjusted profit before tax at actual exchange rates continues to
be negatively impacted by the continued strengthening of Sterling.
Based on current exchange rates the impact of currency movements
would be around GBP17m for the full year, in line with our previous
guidance.
Reorganisation costs and one-off items for continuing operations
were significantly lower in Q3 at GBP0.1m versus GBP5.5m last year,
contributing to an increase in profit before tax of 27.0% in the
quarter. After taking into account currency movements, profit
before tax at AER increased by 16.7%. We now expect reorganisation
costs and one-off items to be less than GBP10m for the year.
Cash flow and interest costs
Operating and free cash flow continue to be strong and we remain
on track to achieve our targets for the year. During the quarter we
took advantage of an invoice factoring exercise in our French
business which is anticipated to increase working capital inflows
by approximately GBP15m. With our improved net debt position we now
expect interest costs to be in the region of GBP47m (at CER) for
the year compared to the previous guidance of GBP50m.
M&A
We acquired 5 businesses in the quarter and have now acquired 18
businesses in pest control in the year along with one small
acquisition in hygiene and three in plants. Combined annual
revenues of the above businesses totalled GBP40m in the 12 months
immediately prior to acquisition.
Commenting on the Q3 results Andy Ransom, CEO of Rentokil
Initial plc, said:
"I am pleased to report that the business maintained the recent
level of revenue growth in the quarter with the Pest Control
category continuing to perform well in our Emerging and Growth
quadrants. Challenging trading conditions persist in our European
businesses, impacting our hygiene and workwear categories in our
Protect & Enhance and Manage for Value quadrants.
"Profit growth in the quarter continues to reflect the benefit
of more efficient businesses and reduced overheads and has been
achieved despite the challenging European trading conditions. We
continue to execute our strategy at pace, to drive improved
revenue, profit and cash, and we expect Q4 operating performance to
be in line with Q3."
Enquiries:
Investors / Analysts: Guy Smith Rentokil Initial plc 01276
536585/07879 662664
Media: Malcolm Padley Rentokil Initial plc 07788 978 199
Justine McIllroy Brunswick Group 020 7404 5959
Nina Coad
Oliver Hughes
A call for investors and analysts will be held on Friday 7
November at 9.15am:
Participant Details:
London, UK: +44(0)203 427 1912
Paris, France: +33(0)1 76 77 22 20
Hong Kong: +852 3002 1615
New York, USA: +1 646 254 3362
Participant PIN code: 7321731#
Playback Details (available for 14 days):
London, UK: +44(0)203 427 0598
Paris, France: +33(0)1 74 20 28 00
Hong Kong: +852 3011 4669
New York, USA: +1 347 366 9565
Playback PIN code: 7321731#
AER - actual exchange rates; CER - constant 2013 exchange
rates
(1) ongoing revenue represents revenue with disposals removed
and includes revenue from acquisitions.
(2) before amortisation and impairment of intangibles (excluding
computer software), reorganisation costs and one-off items, and net
interest credit from pensions
This announcement contains statements that are, or may be,
forward-looking regarding the group's financial position and
results, business strategy, plans and objectives. Such statements
involve risk and uncertainty because they relate to future events
and circumstances and there are accordingly a number of factors
which might cause actual results and performance to differ
materially from those expressed or implied by such statements.
Forward-looking statements speak only as of the date they are made
and no representation or warranty, whether expressed or implied, is
given in relation to them, including as to their completeness or
accuracy or the basis on which they were prepared. Other than in
accordance with the Company's legal or regulatory obligations
(including under the Listing Rules and the Disclosure and
Transparency Rules), the Company does not undertake any obligation
to update or revise publicly any forward-looking statement, whether
as a result of new information, future events or otherwise.
Information contained in this announcement relating to the Company
or its share price, or the yield on its shares, should not be
relied upon as an indicator of future performance. Nothing in this
announcement should be construed as a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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