Half year profits fall for Rentokil Initial
Pre-tax profits fell 45.7 per cent for Rentokil Initial, which has a cleaning services base employing more than 100 in Dudley, in the first half of this year.
They were down from £113.8 million in the first six months of 2019 to £61.8m with revenue falling 0.6 per cent from £1.298 billion to 1.291bn.
The group said it was a highly resilient performance, despite the global Covid-19 crisis.
It had continued to deliver core pest and hygiene services and had moved at pace to generate new revenues from disinfection services.
Decisive action on costs had contained profit reduction from lower revenues.
There was one per cent growth in pest control revenue with hygiene up 10.5 per cent with strong global demand for hygiene products and disinfection services more than offsetting washrooms service declines from temporary business closures.
Half year revenue from disinfection services was £49m and in addition to the existing 1,000 specialist hygiene staff, Rentokil Initial trained 7,000 more to provide this service alongside their existing roles in hygiene and pest control in 66 countries
Eight businesses were acquired in the first quarter of the year - seven in pest control and one in hygiene
Chief executive Andy Ransom said the group had delivered an excellent performance in the first half of the year in keeping essential services on the road for customers who remained open during the pandemic.
"We also moved at pace to develop new revenues to offset service shortfalls, particularly in our hygiene business, and have taken decisive action on costs, with many of our people making personal sacrifices, and enabling us to contain the profit reduction on lower revenue in the second quarter. We have also tightly controlled costs, capital expenditure and working capital to deliver a very good performance on free cash flow.
"Despite a severe global pandemic and associated country lockdowns, we delivered first half ongoing revenues ahead of the same period last year. This is tribute to our 43,000 colleagues around the world, who have demonstrated a remarkable ability to adapt to an unprecedented change in their daily working environment, while remaining focused on delivering excellent customer service.
"On behalf of the board, I would like to publicly thank all our colleagues for their commitment over the last few months, which has been nothing short of outstanding," said Mr Ransom.
He added that while the Covid-19 pandemic was far from over , Rentokil Initial had moved from the crisis phase into the recovery phase.
"The majority of our colleagues are now back at work, we have repaid the Bank of England's covid corporate financing facility and our own revolving credit facility, and we have resumed our mergers and acquisitions programme," he said.
Rentokil Initial is also now expanding its hygiene category into new countries as well as launching additional services.
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