Rentokil full year profit slips but dividend lifted

Business service group Rentokil Initial reported a slight drop in full year profit but upped its dividend.

For the 12 months ended 31 December, pre-tax profit nudged down to £159m from £163.2m in 2014, despite a small uptick in revenue to £1.75bn from £1.74bn.

Stripping out exceptional items, however, adjusted profit rose to £198.0m, which was a 3.8% increase on the previous year, or 13% at constant currency as a stronger sterling versus the euro weighed.

The pest control company recommended a final dividend of 2.06p per share, taking the total payout for the year to 2.93p, which is up 13% from the previous year.

Rentokil said it saw good organic growth in its pest control and hygiene divisions, although the workwear business was impacted by challenging conditions in France and Benelux.

North America was a bright spot, however, with ongoing revenue there up 2.7%.

Chief executive officer Andy Ransom said: “2015 has been a year of further improvement at Rentokil Initial. We have continued to execute our differentiated strategy to drive profitable growth with both focus and pace. This year we have delivered ongoing revenue growth of 6.5%, profit growth from ongoing operations of 8.5% and free cash flow of £148m.

"We have also achieved a step change in the scale of our presence in growth markets through the acquisitions of Steritech, Anderson Pest Solutions and Oliver Exterminating, cementing our position as the number three player in North America, the world's largest pest control market. We will continue to pursue high-quality pest control businesses to infill locally and build further density and margins, particularly in Emerging and Growth markets.”

At 1015 GMT, Rentokil shares were up 2.6% to 167.70p.