Rentokil full-year profit, revenue up

Rentokil Initial posted a rise in pre-tax profit for 2016 as revenue grew and the group benefited from the weakness of the pound.

For the year to the end of December, pre-tax profit came in at £208.5m from £159m the year before, on revenue of £2.17bn, up from £1.8bn.

Acquisitions provided a boost last year, as the company made 41 purchases for £107m, 35 of them in Pest Control, five in Hygiene and one in Other, with combined annualised revenues of £124m. On a like-for-like basis stripping out acquisitions and dispoals, revenue was up 3% from 2015.

In Pest Control, which accounts for more than 50% of group ongoing revenue and ongoing operating profit, organic revenue was up 5.7% with growth through acquisition of 20.2%. In the hygiene division, organic revenue was up 3.1%.

Rentokil lifted its final dividend 16% year-on-year to 2.38p per share, giving a total dividend of 3.37p, up 15%.

Chief executive officer Andy Ransom said: "In 2016 we have continued to execute our strategy at pace. Our organic revenue growth of 3.0% is at its highest level for 10 years with accelerated growth in Pest Control and Hygiene showing continued performance momentum. In addition, we have exceeded our financial targets, growing ongoing revenues by 12.6%,ongoing operating profit by 11.5% and delivering £156m in free cash flow.

"Prospects in the majority of our markets are good and, while conditions in France remain difficult, we are confident of making further progress in the coming year."

At 0900 GMT, the shares were up 0.2% to 236.46p.