UPDATE 1-Rentokil revenue ticks higher on disinfection services expansion, profit slips

(Adds detail on results, outlook, background)

July 30 (Reuters) – Pest control firm Rentokil Initial Plc posted marginally higher first-half revenue and an 11% dip in profits on Thursday, as an expansion of its disinfection services offset the effect of business closures and extra costs in the coronavirus crisis.

The company, which provides commercial pest control and hygiene services, said it was entering the second-half of the year with positive momentum, and hoped to propose a dividend for 2020 if trading continues in line with its expectations.

Operating in around 80 countries and employing roughly 40,000 people globally, Rentokil’s services to hotels, restaurants, schools and the airline industry were stalled by lockdowns, forcing it to lay off some staff, suspend dividend and cut back on spending.

Its hygiene business, which operates across 46 markets, providing hand soaps, sanitizers and deep cleaning services, grew 10.5% as reopening businesses implemented higher hygiene standards.

“We are now expanding our Hygiene category into new countries as well as launching additional services,” Chief Executive Officer Andy Ransom said in a statement.

Ongoing revenue came in at 1.28 billion pounds, up 1% year-on-year, while adjusted pretax profit was 125.6 million pounds for the first six months of 2020, compared with 141.6 million pounds reported a year ago.

The company said that a majority of its staff were now back at work and it has repaid the Bank of England’s Covid Corporate Financing Facility (CCFF) and resumed its mergers and acquisitions programme.

It said the dip in operating profit was mainly due to costs related to bad debts and the protective equipment for employees demanded by the crisis.

$1 = 0.7717 pounds
Reporting by Yadarisa Shabong in Bengaluru; Editing by Rashmi

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source: reuters.com