Rentokil(US:RTO)2025-07-31 10:56Revenue Growth - Group Revenue increased by 3.1% to $3,364 million in H1 2025, with organic revenue growth of 1.6%[20] - North America organic revenue growth improved to 1.4% in Q2 2025, up from 0.7% in Q1 2025[11] - The International business achieved revenue growth of 5.1% in H1 2025, with organic growth of 2.7%[20] - North America revenue increased by 1.9% to $2,106m, with organic growth of 1.1%[30] - International revenue grew by 4.9% to $1,251m, with organic growth of 2.7% driven by strong performance in Southern Europe and Asia[41] - Pest Control revenue increased by 2.7% to $2,791m, with organic growth of 1.8%[48] - Revenue for the six months ended June 30, 2025, was $3,364m, an increase from $3,266m in the same period last year[76] - For the six months ended June 30, 2025, total revenue from continuing operations was $3,364 million, an increase of 3% compared to $3,266 million for the same period in 2024[108] Profitability - Adjusted Operating Profit decreased by 4.5% to $511 million, primarily due to reduced profitability in North America[23] - Adjusted Operating Profit in North America declined by 7.3% to $356m, with an adjusted operating margin of 16.9%[33] - Adjusted Operating Profit for H1 2025 was $511m, down from $537m in H1 2024, reflecting a decrease of $26m[72] - The operating profit for continuing operations decreased to $304 million from $380 million, reflecting a decline of approximately 20%[108] - Operating profit including discontinued operations was $339 million, down from $407 million, indicating a 16.7% decrease[87] Cash Flow and Debt - Free Cash Flow improved by 31.2% to $282 million, with a cash conversion rate of 93%, exceeding the guidance of 80%[26] - Group Free Cash Flow increased to $288m, up $66m from the prior period, primarily due to improved working capital performance and lower interest payments[70] - Net debt increased to $4,220 million, reflecting a net debt to Adjusted EBITDA ratio of 2.8x[6] - Cash interest payments decreased by $25m to $106m, while cash tax payments increased by $7m to $43m[28] - The net cash generated from operating activities for discontinued operations was $57 million, slightly up from $55 million in the prior year[120] - The Group's total net debt increased to $4,212 million as of June 30, 2025, compared to $4,017 million at the end of 2024[140] Acquisitions and Business Strategy - The company acquired 16 Pest Control businesses with revenues of approximately $32m in the year prior to acquisition[51] - The company acquired 18 businesses in the first half of 2025, emphasizing its growth strategy through acquisitions[90] - The company plans to spend approximately $200m on M&A in FY25, focusing on bolt-on deals in Pest Control and Hygiene & Wellbeing[64] - The company plans to operate 150 satellite branches by the end of 2025, up from 100 currently[11] - Integration activities in H2 2025 will focus on standalone commercial branches and refining integration processes[8] Dividends and Shareholder Returns - The company maintained an interim dividend of 4.15 cents per share[11] - An interim dividend of 4.15 cents per share is scheduled for payment on September 22, 2025[74] - The company paid dividends of $198 million to equity shareholders, compared to $186 million in the previous year, an increase of 6.4%[87] Taxation - The effective tax rate for continuing operations was 24.2%, compared to 22% in the prior year[69] - The Group's total income tax expense for the period was $52 million, down from $65 million in June 2024, with an effective tax rate of 24.2% compared to 22.0% in the prior year[110][111] - The Group's Adjusted Effective Tax Rate (ETR) before amortization of intangible assets was 25.0%, compared to 23.1% in June 2024[111] Market Outlook - The global pest control market is projected to grow from $27.3bn in 2024 to around $50bn by 2034, reflecting a CAGR of 6.2%[50] - Organic revenue growth for 2025 is projected at 53%, with North America growing by 22% and International by 31%[173] Financial Position - Total current assets increased to $3,647 million, up from $2,611 million, representing a 39.6% increase year-over-year[81] - Cash and cash equivalents rose to $1,689 million, compared to $1,158 million, marking a 45.7% increase[81] - Total non-current liabilities increased to $5,699 million from $4,694 million, a rise of 21.4%[81] - Total equity decreased slightly to $5,267 million from $5,293 million, a decline of 0.5%[81] Other Financial Metrics - Adjusted EBITDA for the six months ending June 30, 2025, was $686 million, down from $707 million in 2024[191] - Basic adjusted earnings per share for the six months ending June 30, 2025, was 12.46 cents, compared to 14.00 cents in 2024[195] - Cash impact of one-off and adjusting items decreased to $48 million from $52 million, reflecting a reduction of 7.7%[200]