Rentokil Initial PLC Q4 2020 Acquisitions and Trading Update (0002L)
08 January 2021 - 6:00PM
UK Regulatory
TIDMRTO
RNS Number : 0002L
Rentokil Initial PLC
08 January 2021
8 January 2021
Rentokil Initial plc - Q4 2020 Acquisitions and Trading
Update
A very strong end to the year for M&A in our key North
America pest control market with continued strong trading boosted
by momentum in disinfection services
Rentokil Initial plc (FTSE: RTO, "the Company") announces today
the acquisition of Environmental Pest Service ('EPS'), a
full-service, commercial and residential pest control company based
in Tampa, Florida.
EPS was ranked 15(th) in the PCT Magazine 2020 Top 100 listing
of leading US pest control companies and generated annualised
revenues of c.$82m (GBP60m) in 2020. EPS employs c.640 people (of
which 386 are in service roles) in 30 branches across four separate
regions: East Florida; West Florida; North Georgia; and North
Carolina. It has two brand names, Arrow Environmental and Bug
Out.
In addition to the acquisition of EPS, we have acquired a
further eight high quality pest control companies in North America
in Q4, with combined annualised revenues of c.$62m (c.GBP48m) in
2020.
Total acquisitions in 2020
For the full year ended 31 December 2020, we have acquired 23
new businesses, with annualised revenues of over GBP150m, for a
cash spend of c.GBP180 m (of which c.GBP150m was in H2). This
excludes the consideration for EPS which was paid at the beginning
of January 2021.
Announcement of Preliminary Results and Updated Guidance for
2020
Rentokil Initial plc will announce its 2020 Preliminary results
on Thursday, 4 March. In our Q3 Trading Statement last October, we
indicated that despite continued uncertainty across our business as
a result of the ongoing pandemic, we were hopeful of being able to
maintain the momentum we had seen in Q3 into the fourth quarter
which would result in an outcome for the full year at least in line
with expectations. Trading across both our Hygiene and Pest Control
categories has continued to be strong in Q4 - primarily reflecting
continued strong sales from one-off disinfection services - and 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*.
We are looking to the future with confidence. However, while
global vaccination programmes offer hope that we will see an end to
the pandemic, the financial outlook for 2021 inevitably remains
uncertain, in particular with limited visibility on the
sustainability of one-off disinfection services, the recent
strengthening of sterling, and the undetermined impacts arising
from recently rising cases of COVID-19 globally and new and
prolonged country lockdowns. We look forward to providing a further
update with our full year results on 4 March.
Andy Ransom, Chief Executive of Rentokil Initial plc, 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. We have gained approximately 2000 new colleagues from
acquisitions in 2020, and I am delighted to welcome them all to
Rentokil Initial.
"I am also very pleased to announce our acquisition of
Environmental Pest Service. EPS is a high-quality company of
significant scale with a strong reputation for service delivery and
technical ability, and with a culture which will make an excellent
fit with our own. This acquisition is very much in line with our
strategy to acquire pest control businesses that build customer
density and add to our scale in key local markets - by acquiring
EPS we can immediately add density, provide improved customer
service, and provide incremental revenue to several of our
sub-scale existing Rentokil locations on the Florida Gulf Coast, as
well as build on our existing presence in north eastern Florida,
metro Atlanta and North Carolina."
Investor / Analyst enquiries:
Katharine Rycroft, Investor Rentokil Initial
Relations plc 07811 270 734
Media enquiries:
Malcolm Padley, Corporate Rentokil Initial
Communications plc 07788 978 199
* Our Company-compiled current range of analyst forecasts for
Adjusted PBTA for 2020 is GBP292m to GBP337m.
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