REG - Rentokil Initial PLC - Half-year Report
Thu 07:01
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RNS Number : 2908T Rentokil Initial PLC 31 July 2025
2025 Interim Results
Performance and outlook in line with expectations
Improved cashflows. Cost savings on track. Encouraging recent lead generation
Financial Results Adjusted Results Statutory Results
6 months to 30 June 2025
Continuing Operations
$m H1 2025 H1 2024 Change Change (constant currency) H1 2025 H1 2024 Change Change
$m
$m
(reported)
$m
$m
% (reported) (constant currency)
%
%
%
Revenue 3,364 3,266 3.0% 3.1% 3,364 3,266 3.0% 3.1%
EBITDA 686 707 (3.0)%
Operating Profit 511 537 (4.7)% (4.5)% 304 380 (19.9)% (19.7)%
Operating Profit margin 15.2% 16.4% (120)bps (120)bps 9.0% 11.6% (260)bps (260)bps
Profit before Tax 418 459 (8.7)% (7.8)% 216 294 (26.5)% (25.3)%
Free Cash Flow 282 215 31.2% -
Basic EPS 12.46c 14.00c (11.0)% (9.5)% 6.49c 9.09c (28.6)% (26.8)%
Dividend Per Share 4.15c 4.15c - - 4.15c 4.15c - -
Group (including discontinued operations)
Revenue 3,532 3,425 3.1% 3.2%
Operating profit 538 564 (4.5)% (4.4)%
Profit before tax 444 485 (8.4)% (7.5)%
Basic EPS 13.42c 14.76c (9.1)% (7.7)%
Net debt (4,220) (4,070) (3.7)%
Andy Ransom, Chief Executive of Rentokil Initial plc ("the Company"), said:
"We delivered a solid first half performance, in line with expectations, with
Revenue growth of 3.1% and Adjusted Group Profit before tax (including
discontinued operations) of $444m. We also delivered a strong free cash flow
performance, with conversion of 93%, ahead of our guidance of 80%. Our sales
and marketing initiatives in North America are starting to have an impact,
with organic revenue growth of 1.4% in the second quarter up from 0.7% in the
first quarter. We are refocusing our marketing budget towards driving organic
lead flow and we are seeing encouraging results, including from our satellite
branches, where we now have 100 in operation. While it is still early, we are
encouraged with our progress, with residential and termite lead flow growing
in June for the first time this year, up 6.6%. We are also encouraged by the
early results that we are seeing from the door to door pilot that we started
in the second quarter.
Improving our data analytics and insights is allowing us to more precisely
target our underperforming branches with our new sales and marketing
initiatives. Together with our integration experience, it is also helping us
refine our integration plans and timelines. In H2 we will re-start integration
with standalone, mainly commercial branches. Our expectations of the c.$100m
cost reduction opportunity and attaining an operating margin in North America
above 20% post 2026 remain unchanged, but our refined timelines may mean not
all branches are fully integrated by that time.
Current trading is in line with expectations and our outlook for the remainder
of the year remains unchanged. We expect to deliver FY25 results in line with
market expectations."
H1 2025 Financial Highlights
● Financial performance in line with expectations
● Group Revenue growth of 3.1% with International business growth
of 5.1%
● Organic Growth(1) of 1.6%
○ North America organic growth 1.1%; International organic growth
2.7%
● North America organic growth improvement in Q2: 1.4% (Q1: 0.7%)
● Group adjusted operating margin(2) of 15.2%, reduced North
America margin of 16.9%
● Strong cash flow performance; 93% FCF conversion, ahead of our
guidance of 80%
● Interim dividend maintained at 4.15 cents per share
● Net debt to Adjusted EBITDA ratio of 2.8x, reflecting c.$175m
adverse foreign exchange impact on period end net debt (31 December 2024:
2.7x)
H1 2025 Strategic Highlights
Driving the top line
● North America RIGHT WAY 2 continued progress
○ Improved Colleague retention: 80.7% (H1 24: 77.8%)
○ Improved Customer retention: 80.5% (H1 24: 79.8%)
● Refocusing of marketing budget towards organic lead generation
● 100 satellite branches in operation (Q1: 36); 150 planned by end
of year
● Recent improvement in residential and termite lead flow (up 6.6%
in June)
Integration update
● Integration activities in H2 will be focused on:
○ Migrating standalone businesses (mainly commercial businesses
already on Pestpac)
○ Detailed programme of work to make process, system and execution
improvements in previously migrated branches, where lead flow and customer
retention are not yet at their required levels
○ Refining the end-to-end integration playbook for future branch
integration
● Our expectations of the c.$100m cost reduction opportunity from the
integration and attaining an operating margin in North America above 20% post
2026 remain unchanged, but our refined timelines may mean not all branches are
fully integrated by that time
Ongoing focus on core areas
● Sale of France Workwear business; transaction approved by European
Commission and on track to complete in late Q3/earlyQ4 2025
2025 Outlook and H2 current trading
● Current trading is in line with expectations and our outlook for the
remainder of the year remains unchanged. We expect to deliver FY25 financial
results in line with market expectations
Enquiries:
Investors / Analysts: Hugo Fisher Rentokil Initial plc 07920 714700
Morenike Ogunseye 07818 883094
Media: Malcolm Padley Rentokil Initial plc 07788 978199
A management presentation and Q&A for investors and analysts will be held
virtually today, 31 July 2025 at 9.15am (UK time). Dial-in details will be
provided on the website (https://www.rentokil-initial.com/investors.aspx). A
recording will be made available following the conclusion of the presentation.
Notes
With effect from 1 January 2025 the Group changed its presentation currency
from sterling to US dollars. All comparatives from 2024 have been represented
in USD. In addition and following the acquisition of the Terminix business
whereby the majority of the Group's revenues are now in North America, the
Group's remaining regions have been combined into an International segment and
reporting is on this basis. In order to help understand the underlying trading
performance, unless otherwise stated, all commentary and comparable analysis
in the summary and operating review relates to the continuing operations of
the Group on a constant currency basis. The France Workwear business has been
classified as a discontinued operation following the announcement of the
intended sale of the business, and all comparatives have been represented
accordingly.
1 Organic Revenue growth represents the growth in Revenue excluding the effect
of businesses acquired during the year. Acquired businesses are included in
organic measures in the year following acquisition, and the comparative period
is adjusted to include an estimated full year performance for growth
calculations (pro forma revenue).
2 Excludes costs to achieve which are one-off by nature. Non-IFRS measures -
This statement includes certain financial performance measures which are not
measures defined under International Financial Reporting Standards (IFRS).
These measures include Adjusted Operating Profit, Adjusted Profit Before Tax,
Adjusted Profit After Tax, Adjusted EBITDA, Adjusted Interest, Adjusted
Earnings Per Share, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free
Cash Flow Conversion, Adjusted Effective Tax Rate and Organic Revenue.
Management believes these measures provide valuable additional information for
users of the financial statements to aid better understanding of the
underlying trading performance. Adjusted Operating Profit, Adjusted Profit
Before/After Tax and Adjusted EBITDA exclude certain items that could distort
the underlying trading performance of the business. An explanation of all the
above non-IFRS measures used along with reconciliation to the nearest IFRS
measures is provided in Use of Non-IFRS measures in the financial statements.
Summary of financial performance
Regional Performance
Revenue Adjusted Operating Profit
H1 2025 Change H1 2025 Change
$m
%
$m
%
North America
Pest Control 2,044 1.9% 348 (7.4)%
Hygiene & Wellbeing 62 4.0% 8 (0.9)%
2,106 2.0% 356 (7.3)%
International
Pest Control 747 5.7% 153 4.1%
Hygiene & Wellbeing 504 4.3% 89 5.5%
1,251 5.1% 242 4.6%
Central 7 (9.2)% (85) (8.5)%
Restructuring costs - - (2) 4.1%
Total 3,364 3.1% 511 (4.5)%
Category Performance
Revenue Adjusted Operating Profit
H1 2025 $m Change H1 2025 Change
%
$m
%
Pest Control 2,791 2.9% 501 (4.2)%
Hygiene & Wellbeing 566 4.3% 97 5.0%
Central 7 (9.2)% (85) (8.5)%
Restructuring costs - - (2) 4.1%
Total 3,364 3.1% 511
Revenue
Group Revenue increased 3.1% to $3,364m in H1. Group Organic Revenue grew
1.6%. Revenue growth in North America was up 2.0% (+1.1% organic). The
International business performed well with Revenue up 5.1% in H1 (+2.7%
Organic) with growth across the region.
Our Pest Control category grew Revenue by 2.9% (1.8% Organic) to $2,791m,
driven mainly by 3.8% Organic Growth in our International region. Hygiene
& Wellbeing Revenue increased by 4.3% (0.9% Organic) to $566m, driven
principally by increased pricing.
Revenue ($m) Q1 Q2 H1
Group 1,556 1,808 3,364
North America 951 1,155 2,106
International 601 650 1,251
Organic Revenue Growth Q1 Q2 H1
Group 1.6% 1.6% 1.6%
North America 0.7% 1.4% 1.1%
International 3.2% 2.2% 2.7%
Profit
Adjusted Operating Profit in H1 reduced by 4.5% compared to the prior period,
to $511m, driven principally by the reduced profitability in North America
from lower volumes more than offsetting profit growth in our International
business. The period saw a 120bps decrease year on year in Group Adjusted
Operating Margin to 15.2%. Within business categories, Adjusted Operating
Margin for Pest Control was 18.0% (H1 24: 19.2%). Hygiene & Wellbeing
Adjusted Operating Margin was 17.2% (H1 24: 17.2%).
Adjusted Profit before Tax of $418m, which excludes one-off and adjusting
items and amortisation costs, decreased by 7.8% predominantly due to reduced
profitability in North America. Adjusted interest of $98m at actual exchange
rates was $15m higher year on year. One-off and adjusting items of $110m
includes an increase to the provision for Termite Damage claims of $79m (H1
24:$nil), $30m (H1 24: $39m) of integration costs related to the Terminix
acquisition and a net $1m (H1 24: $8m) of other M&A costs. Statutory
Operating Profit was $304m (H1 24: $380m) with the decrease principally due to
the $79m increase to the provision for Termite Damage claims. Statutory profit
before tax was $216m (H1 24: $294m).
Cash Flow
Cash generation continues to be an important priority with a strong focus on
operational cash conversion as well as a disciplined approach to working
capital management, yielding improved results in the half year.
Net cash flows from operating activities were $412m. Free Cash Flow of $282m
was $67m higher than in H1 24 due to an improved working capital performance.
The $66m (H1 24: $5m) one-off and adjusting items is predominantly the
increase in the provision for Termite Damage claims, offset by deferred
consideration releases.
The Group had a $51m working capital outflow in the first six months of the
year, an improvement of $64m compared to the comparable period. The movement
on provisions of $40m predominantly reflects the increase in the provision for
Termite Damage claims. Capital expenditure of $89m was incurred in the period
(H1 24: $89m), with lease payments at $90m, compared to $87m in the prior
period.
Cash interest payments of $106m were $25m lower than in the prior year,
principally reflecting changes in timing of bond interest payments. Cash tax
payments for the period were $43m, an increase of $7m compared with the
corresponding period last year. Adjusted Free Cash Flow Conversion was 93%,
ahead of guidance.
Cash spend on current and prior year acquisitions was $70m, dividend payments
were $198m and the cash impact of one-off and adjusting items was $48m,
largely related to the costs associated with the Terminix integration.
For FY 25 we now expect c.$200m of M&A expenditure and capital expenditure
of c.$210-220m. In addition to reducing net debt from the sale proceeds, the
pending sale of the France Workwear business would reduce capital expenditure
by c.$100m on an annualised basis.
Regional performance review
North America
H1 2025 H1 2024 Change (reported) Change (constant currency) Organic
Growth
$m
$m % %
Revenue 2,106 2,067 1.9% 2.0% 1.1%
Operating Profit 213 308 (30.8)% (30.7)%
Adjusted Operating Profit 356 385 (7.3)% (7.3)%
Adjusted Operating Margin 16.9% 18.6% (1.7)% (1.7)%
Organic Growth Q1 Q2 H1 2025
North America 0.7% 1.4% 1.1%
North America Pest Control 0.5% 1.6% 1.1%
North America Pest Control Services (0.2%) 0.3% 0.1%
North America includes Pest Control and Hygiene & Wellbeing and Business
Services.
North America Pest Control Services is Pest Control excluding Business
Services.
H1 2025 Performance
Half year Revenue was up 2.0%, with Organic Revenue up 1.1%. There was an
improved performance during the half year with 1.4% Organic Revenue growth in
Q2 (0.7% in Q1). Overall, good price realisation and contributions from
acquisitions have more than offset volume reductions to deliver revenue
growth. Organic Revenue growth in Pest Control Services for our commercial,
residential, and termite customers was 0.1%, with Q2 driven by a stronger
performance in June (0.3% in Q2, -0.2% in Q1).
North America Business Services has seen positive momentum during H1, with
Revenue of $400m and Organic Growth of 5.8%.
During the period we saw ongoing price inflation, particularly in relation to
labour. Consequently, Adjusted Operating Margin in North America declined to
16.9% and Adjusted Operating Profit of $356m was down 7.3%. Statutory
Operating Profit was $213m.
In-bound residential lead flow remained weak until April but has seen
substantial improvements since then as a result of our new sales and marketing
strategies, with June lead flow up 6.6%.
Customer retention improved over H124, from 79.8% to 80.5%. Technician
participation in the Trusted Advisor lead programme improved to 64% (FY 24:
50%), supported by stronger alignment between Sales and Service under Field
Operations leadership, helping drive improved customer engagement.
Total North America colleague retention increased 2.9ppts to 80.7% (H1 24:
77.8%).
Our North American bolt-on M&A programme continued, with the purchase of 8
businesses with combined revenues of c.$18m in the year prior to purchase. We
continue to selectively pursue high quality M&A assets in the North
America region.
Integration update
Improving our data analytics and insights is allowing us to more precisely
target our underperforming branches with our new sales and marketing
initiatives. Together with our integration experience, it is also helping us
refine our integration plans and timelines. In H2 we will re-start integration
with standalone, mainly commercial branches and complete a detailed programme
of work to make process, system and execution improvements in previously
migrated branches, where lead flow and customer retention are not yet at their
required levels. Our expectations of the c.$100m cost reduction opportunity
from the integration and attaining an operating margin in North America above
20% post 2026 remain unchanged, but our refined timelines may mean not all
branches are fully integrated by that time.
We continue to achieve cost synergies in 2025, whilst also continuing our
investments in salary and benefit harmonisation, safety, innovation and IT. A
number of efficiency programmes are underway to deliver the c.$100m cost
reduction including a headcount reduction programme during the period,
procurement initiatives to benefit from purchasing scale and back-office role
outsourcing.
We continue to expect total one-time integration costs to be c.$350m. This
encompasses c.$250m incurred to 2024 and c.$100m across 2025 and 2026.
Legacy termite warranty obligations
The methodology for assessing the appropriate provision in relation to termite
warranty claims looks out over a sixteen year period and is sensitive to
movements in the underlying assumptions relating to the number, location and
severity of those claims. In the first half of the year we saw an increase in
the number of complex litigation claims, outside of Mobile Alabama, when
compared to similar claims in the same period of 2024. We also saw a 9%
increase in the cost per warranty claim in the period, as a proactive strategy
to solve customer problems and reduce litigation continues. As a result, the
provision in relation to such claims has been increased from $236m at 31
December 2024 to $276m at 30 June 2025.
International
H1 2025 H1 2024 Change (reported) Change (constant currency) Organic
Growth
$m
$m % %
Revenue 1,251 1,192 4.9% 5.1% 2.7%
Operating Profit 214 194 10.0% 9.4%
Adjusted Operating Profit 242 231 4.9% 4.6%
Adjusted Operating Margin 19.3% 19.3% -% (0.1)%
Organic Growth Q1 Q2 H1 2025
International 3.2% 2.2% 2.7%
H1 2025 Performance
Revenue
Half year Revenue was up 5.1%, Organic Revenue was up 2.7%, with growth across
the business.
Growth in Europe was particularly strong, driven by price increases and
resilience in overall demand, predominantly from the Southern European
countries of Portugal and Spain.
In Asia, we saw strong growth in Indonesia and India, supported in the latter
by the acquisition and successful integration of the Hi Care business.
However, International growth was impacted by a weaker revenue performance in
the UK, where strong performance in core Pest was offset by our Property
Service business being impacted by the slowdown of the UK commercial property
market and tightening Local Authority spending.
In our Pacific region, organic revenue growth was slightly below the average
for International, with good growth in Pest Control and Ambius mitigating a
flat organic performance in Hygiene. Within Pest Control, our contract
business performed well, offsetting a subdued jobbing market, which was
impacted by weather delays due to both flooding and droughts.
Profit
Adjusted Operating Profit of $242m was up 4.6%, broadly in line with revenue
growth. Adjusted Operating Margin in our International division remained at
19.3%. Statutory Operating Profit was $214m, compared to $194m in the prior
period.
Europe adjusted profit was slightly up, despite a small decrease in margin.
While there has been ongoing inflationary pressure throughout the period, we
have continued to be successful at mitigating its impact by pass-through
pricing.
The UK and Sub-Saharan Africa region delivered resilient profit growth despite
revenue headwinds against a continued subdued macro-economic backdrop.
Adjusted Operating Profit increased ahead of the divisional average with
operating margins also showing good growth in the period. The Hygiene and
Wellbeing category showed good margin growth through price and yield
management, continual focus on higher margins sectors, and continual process
improvement
Within Asia and MENAT, operating profit increased ahead of the regional
average. Margin was modestly up as a result of continued increasing scale in
India and Indonesia, investment in Singapore in 2024 supporting margin
improvement in 2025 and pricing continuing to improve in India.
Within the Pacific region, operating profit grew slightly below the overall
International region, consistent with the revenue growth.
The International region acquired 10 businesses with total revenues in the
year prior to purchase of $17m.
Category performance review
Pest Control
H1 2025 H1 2024 Change (reported) Change (constant currency) Organic
Growth
$m
$m % %
Revenue 2,791 2,717 2.7% 2.9% 1.8%
Operating Profit 329 415 (20.8)% (21.0)%
Adjusted Operating Profit 501 522 (4.1)% (4.2)%
Adjusted Operating Margin 18.0% 19.2% (1.2)% (1.3)%
Organic Growth Q1 Q2 H1
Pest Control 1.7% 1.9% 1.8%
Our Pest Control business is the largest operator in both the US, the world's
biggest pest control market, and the world overall, providing services in
around 90 markets. We are a leading global player in a resilient and
non-cyclical industry characterised by positive and strong long-term
structural growth drivers.
Market
According to latest industry reports, published in H1 25, over the past 10
years the global pest control market has grown from a value of $14.4bn in 2014
to $27.3bn in 2024 at a CAGR of 6.6%. Industry forecasts for the next 10 years
deliver a CAGR of 6.2% - with the value of the global market expected to reach
around $50bn by 2034.
H1 2025
In H1 25, our Pest Control category grew Revenue by 2.9% (1.8% Organic) to
$2,791m. Within the International business, good Revenue growth of 5.7% (3.8%
Organic) was driven principally by the performance in Europe (3.8% Organic
Growth) and Asia and MENAT (4.8% Organic Growth). In the UK our core Pest
Control business grew 7.5% organically, held back by lower growth in Property
Care. Pest Control Revenue growth in the International region of 5.7% was
partially offset by growth of 1.9% in North America.
Adjusted operating profit of $501m declined by 4.2%, with International growth
offset by decline in North America.
We acquired 16 Pest Control businesses in the period, with revenues in the
year prior to acquisition of c.$32m.
Innovation and Technology
We lead our industry in the use of digital technologies in pest control, and
we are continuing to build upon this competitive advantage. Our smart
technology is providing more remote monitoring solutions and increased
transparency of data.
Our digital Pest Control programme continues to move forward. An additional
106,000 PestConnect devices, which offer 24/7 monitoring, were installed in
customers' premises over the last 12 months to 30 June 2025, and we now have
around 540,000 devices operating in customers' premises. The number of
connected customer sites has reached 32,500.
In H1, we began to roll out our first AI-enabled pest control services. Our
new PestConnect Optix service utilises AI and motion-detection camera
technology to identify individual rodents. Now in operation in the UK, France
and Netherlands, it is adding predominantly one-time job revenue to existing
customer accounts. We're also piloting this new service in Belgium, Norway,
Portugal, Australia and the US.
Our Innovation teams have continued to explore ways to expand the AI-enabled
Optix service to other services and different pest types and are currently
piloting the new Lumnia Optix service - a digital insect light trap solution
with camera and AI analysis. Launches are planned in the International region
and then will be expanded initially into US key accounts.
Hygiene & Wellbeing
H1 2025 H1 2024 Change (reported) Change (constant currency) Organic
Growth
$m
$m % %
Revenue 566 542 4.5% 4.3% 0.9%
Operating Profit 98 87 12.8% 12.9%
Adjusted Operating Profit 97 94 4.9% 5.0%
Adjusted Operating Margin 17.2% 17.2% - 0.1%
Organic Growth Q1 Q2 H1
Hygiene & Wellbeing 1.6% 0.4% 0.9%
Rentokil Initial is a leader in the provision of hygiene and wellbeing
services, operating in around 70 markets around the world. Inside the washroom
we provide hand hygiene (soaps and driers), air care, in-cubicle (feminine
hygiene units), no-touch products and digital hygiene services. In addition to
core washroom hygiene, we deliver specialist services outside the washroom
such as premium scenting, plants, air quality monitoring, green walls and
specialist waste collection services.
Market
According to latest industry reports, published in H1 25, over the next 10
years the global Core Hygiene market is expected to grow at a CAGR of
approximately 4%, driven by macro factors including the needs of an ageing
population, the rise of urban populations and middle classes, and increasing
hygiene expectations.
H1 2025
In H1 25, Hygiene & Wellbeing Revenue increased by 4.3% (0.9% Organic) to
$566m, driven principally by increased pricing. Within Europe and LATAM
revenue grew organically by 2.6% led equally by Core Hygiene and Enhanced
Environments.
Within the UK and Sub-Saharan Africa region, a more challenging environment
led to Organic Revenue decrease of 1.6%, while in our Pacific region market
conditions remain challenging, with heightened price competition and lower
customer retention resulting in low contract revenue growth in H1.
Adjusted operating profit increased by 5.0%, broadly in line with revenue
growth as the pricing benefit and contribution from acquisitions more than
offset the impact of cost inflation. Adjusted operating profit margins
remained flat as pricing and tight cost control mitigated cost inflation.
We acquired two Hygiene and Wellbeing companies with revenues of c.$4m in the
year prior to purchase.
Operational excellence
The Hygiene & Wellbeing business continues to focus on operational
excellence, product development, disciplined sales activity and dedicated
Hygiene digital marketing. It has shared overheads with Pest Control and areas
of operational efficiency including density (route and product), improved
colleague retention, deploying technology, and procurement - materials and
product costs.
Disposal of France Workwear
On the 28 May 2025, we announced our agreement with H.I.G Capital for the
intended sale of France Workwear which values France Workwear at a gross
enterprise value of approximately €410m (c.$465m) on a cash-free debt-free
basis including an earn-out mechanism with a maximum value of €30m (c.$34m)
linked to the performance of the business in 2026. Total net cash proceeds are
expected to be approximately €370m (c.$420m), subject to customary closing
adjustments and the final earn-out outcome. Completion is expected to occur in
late Q3 / early Q4 25. The business has been accounted for as a discontinued
operation since 31 May 2025. In FY 24, France Workwear, including flat linen
textile and clean room business, generated Revenue of $324m, Adjusted
Operating Profit of $57m and had associated capital expenditure of $93m.
Good contributions from bolt-on M&A
In H1, we acquired 18 businesses, comprising 16 in Pest Control and two in
Hygiene & Wellbeing for a total consideration of $68m, with revenues of
c.$36m in the year prior to purchase. We added eight new businesses in North
America during the period with c.$18m revenues acquired, and 10 businesses in
our International region (annualised revenues of c.$17m).
M&A remains relevant for our strategy for growth. We continue to seek
attractive bolt-on deals, both in Pest Control and Hygiene & Wellbeing, to
build density in existing and new markets. Our pipeline of prospects remains
strong and our current guidance on spend on M&A for FY25 is now c.$200m.
Employer of Choice
Rentokil Initial is committed to being a world-class Employer of Choice, with
colleague safety and the attraction, recruitment and retention of the best
people from the widest possible pool of talent, being key business objectives
globally.
Group colleague retention continued to rise at 87.0% (H1 24: 85.9%).
Financial review
Central and regional overheads
Central and regional overheads of $85m were up 8.5% on a constant currency
basis predominantly as a result of inflationary increases.
Restructuring costs
With the exception of integration costs for significant acquisitions, the
Group reports restructuring costs within Adjusted Operating Profit. Costs
associated with significant acquisitions are reported as one-off and adjusting
items and excluded from Adjusted Operating Profit. Restructuring costs of $2m
were in line with the prior year.
Interest
Adjusted interest of $98m includes $15m of lease interest charges and a $24m
offsetting reduction from the impacts of hyperinflation and net interest
received. In the year, hyperinflation of $1m was $6m lower than the prior year
(HY 24: $7m) due to a drop in hyperinflation in Argentina and devaluation of
the Argentinian peso. Cash interest in HY 25 was $106m (HY 24: $131m), with
the year on year reduction principally reflecting changes in timing of bond
interest payments.
Tax
The income tax charge for the period on continuing operations at actual
exchange rates was $52m on the reported profit before tax of $216m, giving an
effective tax rate (ETR) of 24.2% (HY 24: 22%). The Group's ETR before
amortisation of intangible assets (excluding computer software), one-off and
adjusting items and the net interest adjustments for HY25 was 25.0% (HY 24:
23.1%). This compares with a blended rate of tax for the countries in which
the Group operates of 25.2% (HY 24: 25.3%).
Net debt and cash flow
Group Free Cash Flow was $288m, $66m better than the prior period,
predominantly due to an improved working capital performance and lower
interest payments. After M&A spend of $70m, dividends of $198m and net
debt related cash inflows of $562m, there was an increase in cash and cash
equivalents of $534m compared to a decrease in the prior period of $125m.
However, the weakening of the USD had a translational impact on our EUR and
GBP denominated bonds carrying value as well as a positive impact on our EUR
denominated derivatives leading to a net c.$175m adverse foreign exchange
impact. This resulted in net debt of $4,220m, up $204m from the year end.
The debt related cash inflows of $562m resulted from the issuance of the
Group's inaugural USD bond transaction in April, raising $1.25bn across two
tranches; $750m 5 year bond at 5.0% and a $500m 10 year bond at 5.625%.
Subsequently the Group repaid its $700m term loan which was falling due in
October 2025.
$m at actual exchange rates Year to Date
2025 HY 2024 HY Change
$m $m $m
Adjusted Operating Profit 511 537 (26)
Depreciation 158 153 5
Other 17 17 -
Adjusted EBITDA 686 707 (21)
One-off and adjusting items (non-cash) (66) 5 (71)
Working capital (51) (115) 64
Movement on provisions 40 (41) 81
Capex - additions (89) (89) -
Capex - disposals 1 2 (1)
Capital of lease payments and initial direct costs incurred (90) (87) (3)
Interest (106) (131) 25
Tax (43) (36) (7)
Free Cash Flow - continuing operations 282 215 67
Free Cash Flow - discontinued operations 6 7 (1)
Free Cash Flow 288 222 66
Acquisitions (70) (96) 26
Dividends (198) (186) (12)
Cash impact of one-off and adjusting items (48) (52) 4
Debt related cash flows
Cash inflow/(outflow) on settlement of debt related foreign exchange forward 30 (8) 38
contracts
Proceeds from issue of debt 1,232 - 1,232
Debt repayments (700) (5) (695)
Debt related cash flows 562 (13) 575
Net increase/ (decrease) in cash and cash equivalents 534 (125) 659
Cash and cash equivalents at the beginning of the year 467 1,062 (595)
Exchange gains /(losses) on cash and cash equivalents 26 (31) 57
Cash and cash equivalents at end of the financial year 1,027 906 121
Net increase/(decrease) in cash and cash equivalents 534 (125) 659
Debt related cash flows (562) 13 (575)
IFRS 16 asset/ (liability) movement 5 (1) 6
Debt acquired - (5) 5
Bond interest accrual 16 44 (28)
Foreign exchange translation and other items (197) 11 (208)
Increase in net debt (204) (63) (141)
Opening net debt (4,016) (4,007) (9)
Closing net debt (4,220) (4,070) (150)
Funding
As at 30 June 2025, the Group had liquidity headroom of $2,003m, including
$1,000m of undrawn revolving credit facilities, with a maturity date of
October 2029. The net debt to Adjusted EBITDA ratio was 2.8x at 30 June 2025
(31 December 2024: 2.7x).
Interim Dividend
An interim dividend payment of 4.15c per share, will be paid on 22 September
2025 to shareholders on the register at the close of business on 15 August
2025. The last day for DRIP elections is 1 September 2025. These interim
financial statements do not reflect this dividend payable.
Technical guidance update for FY 25
Current guidance* Prior guidance**
(6 March 2025)
P&L
Restructuring costs; and One-off/Adjusting items excl. Terminix $10m; $10m $10m; $15m
Terminix integration Costs to Achieve*** c.$70-80m c.$55-65m
P&L adjusted interest costs (incl. hyperinflation) c.$200-210m (incl. $5-10m) c.$190-200m (incl. 5-10)
Estimated Adjusted Effective Tax Rate (%) 25%-26% 25%-26%
Share of Profits from Associates c.$8-10m c.$8-10m
Impact of FX within range**** c. -$10 to +$10m c. -$10 to -$20m
Intangibles amortisation $190-200m $190-200m
Cash
One-off and adjusting items c.$80-90m c.$70-80m
Working Capital outflow; and provision payments c.$75-85m (outflow); c.$75-85m (outflow); c.$80-90m
c.$80-90m
Capex excluding ROU asset lease payments $210-220m $300-310m
Cash interest c.$190-200m c.$185-195m
Cash tax payments $110-120m $140-150m
Anticipated spend on M&A in 2025 c.$200m c.$250m
* For Continuing Operations
** For Group (prior to the announcement of the sale of France Workwear)
*** Reported as one-off and adjusting items and excluded from Adjusted
Operating Profit and Adjusted PBTA
**** Based on maintenance of current FX rates
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the period ended 30 June 2025
Note Unaudited Unaudited / Represented
6 months to
6 months to
30 June
30 June
2025
2024(1)
$m
$m
Continuing operations
Revenue 4 3,364 3,266
Operating expenses (3,021) (2,855)
Net impairment losses on financial assets (39) (31)
Operating profit 304 380
Finance income 24 31
Finance cost (117) (122)
Share of profit from associates net of tax 5 5
Profit before income tax 216 294
Income tax expense 5 (52) (65)
Profit from continuing operations 164 229
Profit from discontinued operations 6 24 19
Profit for the interim period 188 248
Profit for the period attributable to:
Equity holders of the Company 188 248
Non-controlling interests - -
Other comprehensive income:
Items that may be reclassified subsequently to the income statement:
Re-measurement of net defined benefit liability 1 -
Net exchange adjustments offset in reserves (182) (18)
Net gain/(loss) on net investment hedge 165 (11)
Effective portion of changes in fair value of cash flow hedge (21) 6
Cost of hedging (1) (2)
Tax related to items taken to other comprehensive income 12 2
Other comprehensive income for the period (26) (23)
Total comprehensive income for the period 162 225
Total comprehensive income for the period attributable to:
Equity holders of the Company 162 225
Non-controlling interests - -
Total comprehensive income for the period arising from:
Continuing operations 119 214
Discontinued operations 6 43 11
162 225
Earnings per share for profit from continuing operations attributable to the
Company's equity holders:
Basic (cents) 6.49 9.09
Diluted (cents) 6.47 9.06
Earnings per share attributable to the Company's equity holders:
Basic (cents) 7.44 9.85
Diluted (cents) 7.41 9.81
1. With effect from 1 January 2025 the Group changed its presentation currency
from sterling to US dollar. All comparatives from 2024 have been represented
in US dollar (see Note 2). Comparatives have also been represented following
the announcement of the intention to sell the France Workwear operations (see
Note 6).
The weighted average number of ordinary shares in issue is 2,522m (30 June
2024: 2,521m). For the diluted EPS calculation the adjustment for share
options and LTIPs is 9m (30 June 2024: 9m).
Consolidated Balance Sheet
Note Unaudited Unaudited
At 30
At 31
June
December
2025
2024
$m
$m
Assets
Non-current assets
Intangible assets 8,957 8,899
Property, plant and equipment 434 628
Right-of-use assets 584 577
Investments in associated undertakings 54 46
Other investments 26 26
Deferred tax assets 5 51 43
Contract costs 296 298
Retirement benefit assets 12 4
Trade and other receivables 59 71
Derivative financial instruments 11 113 8
Total non-current assets 10,586 10,600
Current assets
Other investments 2 1
Inventories 281 287
Trade and other receivables 1,180 1,137
Current tax assets 14 28
Derivative financial instruments 11 68 -
Cash and cash equivalents 1,689 1,158
Total current assets excluding assets classified as held for sale 3,234 2,611
Assets classified as held for sale 6 413 -
Total current assets 3,647 2,611
Liabilities
Current liabilities
Trade and other payables (1,371) (1,400)
Current tax liabilities (54) (53)
Provisions for liabilities and charges 13 (158) (144)
Bank and other short-term borrowings (1,309) (1,460)
Lease liabilities (166) (163)
Derivative financial instruments 11 (7) (4)
Total current liabilities excluding liabilities classified as held for sale (3,065) (3,224)
Liabilities classified as held for sale 6 (202) -
Total current liabilities (3,267) (3,224)
Non-current liabilities
Other payables (64) (86)
Bank and other long-term borrowings (4,178) (3,127)
Lease liabilities (388) (394)
Deferred tax liabilities 5 (598) (638)
Retirement benefit obligations (31) (32)
Provisions for liabilities and charges 13 (404) (381)
Derivative financial instruments 11 (36) (36)
Total non-current liabilities (5,699) (4,694)
Net assets 5,267 5,293
Equity
Capital and reserves attributable to the Company's equity holders
Share capital 41 41
Share premium 20 20
Other reserves (971) (932)
Retained earnings 6,179 6,166
5,269 5,295
Non-controlling interests (2) (2)
Total equity 5,267 5,293
Consolidated Statement of Changes in Equity
Attributable to equity holders of the Company
Share Share Other Retained Non- Total
capital
premium
reserves
earnings
controlling
equity
$m
$m
$m
$m
interests
$m
$m
At 1 January 2024 41 19 (903) 6,053 (2) 5,208
Profit for the period - - - 248 - 248
Other comprehensive income:
Net exchange adjustments offset in reserves - - (18) - - (18)
Net loss on net investment hedge - - (11) - - (11)
Net gain on cash flow hedge(1) - - 6 - - 6
Cost of hedging - - (2) - - (2)
Tax related to items taken directly to other comprehensive income - - - 2 - 2
Total comprehensive income for the period - - (25) 250 - 225
Transactions with owners:
Dividends paid to equity shareholders - - - (186) - (186)
Cost of equity-settled share-based payment plans - - - 14 - 14
Tax related to items taken directly to equity - - - (1) - (1)
At 30 June 2024 (unaudited) 41 19 (928) 6,130 (2) 5,260
At 1 January 2025 41 20 (932) 6,166 (2) 5,293
Profit for the period - - - 188 - 188
Other comprehensive income:
Remeasurement of net defined benefit liability - - - 1 - 1
Net exchange adjustments offset in reserves - - (182) - - (182)
Net gain on net investment hedge - - 165 - - 165
Net loss on cash flow hedge(1) - - (21) - - (21)
Cost of hedging - - (1) - - (1)
Tax related to items taken directly to other comprehensive income - - - 12 - 12
Total comprehensive income for the period - - (39) 201 - 162
Transactions with owners:
Dividends paid to equity shareholders - - - (198) - (198)
Cost of equity-settled share-based payment plans - - - 12 - 12
Tax related to items taken directly to equity - - - (3) - (3)
Movement in the carrying value of put options - - - 1 - 1
At 30 June 2025 (unaudited) 41 20 (971) 6,179 (2) 5,267
1. $21m net loss (2024: $6m net gain) on cash flow hedge includes a $44m gain
(2024: $45m loss) from the effective portion of changes in fair value and a
$65m loss (2024: $51m gains) reclassification to the income statement due to
changes in foreign exchange rates.
Shares of $nil (2024: $nil) have been netted against retained earnings. This
represents 10.3m (2024: 11.9m) shares held by the Rentokil Initial Employee
Share Trust. The market value of these shares at 30 June 2025 was $50m (2024:
$69m). Dividend income from, and voting rights on, the shares held by the
Trust have been waived.
Consolidated Statement of Changes in Equity (continued)
Analysis of other reserves
Capital Merger Cash flow Translation Cost of Total
reduction
relief
hedge
reserve
hedging
$m
reserve
reserve
reserve
$m
$m
$m
$m
$m
At 1 January 2024 (3,146) 3,327 9 (1,099) 6 (903)
Net exchange adjustments offset in reserves - - - (18) - (18)
Net loss on net investment hedge - - - (11) - (11)
Net gain on cash flow hedge(1) - - 6 - - 6
Cost of hedging - - - - (2) (2)
Total comprehensive income for the period - - 6 (29) (2) (25)
At 30 June 2024 (unaudited) (3,146) 3,327 15 (1,128) 4 (928)
At 1 January 2025 (3,146) 3,327 44 (1,156) (1) (932)
Net exchange adjustments offset in reserves - - - (182) - (182)
Net gain on net investment hedge - - - 165 - 165
Net loss on cash flow hedge(1) - - (21) - - (21)
Cost of hedging - - - - (1) (1)
Total comprehensive income for the period - - (21) (17) (1) (39)
At 30 June 2025 (unaudited) (3,146) 3,327 23 (1,173) (2) (971)
1. $21m net loss (2024: $6m net gain) on cash flow hedge includes a $44m gain
(2024: $45m loss) from the effective portion of changes in fair value and a
$65m loss (2024: $51m gains) reclassification to the income statement due to
changes in foreign exchange rates.
Consolidated Cash Flow Statement
Note 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Cash flows from operating activities
Operating profit from:
- Continuing operations 304 380
- Discontinued operations 6 35 27
Operating profit including discontinued operations 339 407
Adjustments for:
- Depreciation and impairment of property, plant and equipment 95 98
- Depreciation and impairment of leased assets 80 79
- Amortisation and impairment of intangible assets (excluding computer 97 110
software)
- Amortisation and impairment of computer software 18 16
- Other non-cash items 13 17
Changes in working capital (excluding the effects of acquisitions and exchange
differences on consolidation):
- Inventories 2 7
- Contract costs (9) (7)
- Trade and other receivables (47) (89)
- Trade and other payables and provisions 34 (75)
Interest received 81 24
Interest paid(1) (188) (156)
Income tax paid 5 (46) (39)
Net cash flows from operating activities 469 392
Cash flows from investing activities
Purchase of property, plant and equipment (108) (106)
Purchase of intangible fixed assets (28) (27)
Proceeds from sale of property, plant and equipment 1 2
Acquisition of companies and businesses, net of cash acquired 8 (70) (96)
Net cash flows from investing activities (205) (227)
Cash flows from financing activities
Dividends paid to equity shareholders 7 (198) (186)
Capital element of lease payments (94) (91)
Cash inflow/(outflow) on settlement of debt-related foreign exchange forward 30 (8)
contracts
Proceeds from new debt 1,232 -
Debt repayments (700) (5)
Net cash flows from financing activities 270 (290)
Net increase/(decrease) in cash and cash equivalents 534 (125)
Cash and cash equivalents at beginning of period 467 1,062
Exchange gain/(loss) on cash and cash equivalents 26 (31)
Cash and cash equivalents at end of the financial period 1,027 906
1. Interest paid includes the interest element of lease payments of $15m
(2024: $16m).
Explanatory notes to the unaudited interim financial statements
1. General information
The Company is a public limited company incorporated in England and Wales and
domiciled in the UK with listings on the London Stock Exchange and the New
York Stock Exchange. The address of its registered office is Rentokil Initial
plc, Compass House, Manor Royal, Crawley, West Sussex, RH10 9PY.
The consolidated half-yearly financial information for the half-year to 30
June 2025 was approved on 30 July 2025 for issue on 31 July 2025.
On page 83 and 84 of the 2024 Annual Report we set out the Group's approach to
risk management and on pages 85 to 89 we define the principal risks that are
most relevant to the Group. These risks are described in detail and have
mitigating actions assigned to each of them. In our view the principal risks
remain unchanged from those indicated in the Annual Report 2024. A summary of
the risks is laid out in the table below:
Principal risk Summary of risk
Failure to integrate acquisitions and execute disposals from continuing The Group has a strategy that includes growth by acquisition, and has acquired
business 18 businesses in H1 2025. These companies need to be integrated quickly and
efficiently to minimise potential impact on the acquired business and the
existing business.
Failure to develop products and services that are tailored and relevant to The Group operates across markets that are at different stages in the economic
local markets and market conditions cycle, at varying stages of market development and have different levels of
market attractiveness. We must be sufficiently agile to develop and deliver
products and services that meet local market needs which allows us to meet our
growth objectives and stay ahead in a highly competitive industry.
Failure to grow our business profitably in a changing macro-economic The Group's two core categories (Pest Control and Hygiene & Wellbeing)
environment operate in a global macro-economic environment that is subject to uncertainty
and volatility.
Failure to mitigate against financial market risks Our business is exposed to foreign exchange risk, interest rate risk,
liquidity risk, counterparty risk and settlement risk.
Breaches of laws or regulations (including tax, competition and anti-trust As a responsible company we aim to comply with all laws and regulations that
laws) apply to our businesses across the globe.
Failure to ensure business continuity in case of a material incident The Group needs to have resilience to ensure business can continue if impacted
by external events, e.g. cyber attack, hurricane or terrorism.
Fraud, financial crime and loss or unintended release of personal data Collusion between individuals, both internal and external, could result in
fraud if internal controls are not in place and working effectively. The
business holds personal data on colleagues, some customers and suppliers;
unintended loss or release of such data may result in sanctions, fines and
reputational risk.
Safety, health and the environment (SHE) and sustainability The Company is responsible for minimising its environmental impact and
ensuring the health and safety of its employees, customers, and other
stakeholders in the workplace.
Failure to deliver consistently high levels of service to the satisfaction of Our business model depends on servicing the needs of our customers in line
our customers with internal high standards and to levels agreed in contracts.
These interim financial results do not comprise statutory accounts within the
meaning of Section 435 of the Companies Act 2006, and should be read in
conjunction with the Annual Report 2024. Those accounts have been audited and
delivered to the registrar of companies. The report of the auditor was
unqualified, did not include a reference to any matters to which the auditor
drew attention by way of emphasis without qualifying their report and did not
contain statements under section 498(2) or (3) of the Companies Act 2006.
For all information relating to 2024 results please refer to the Annual Report
2024 which can be accessed here:
https://www.rentokil-initial.com/investors/annual-reports.aspx
2. Basis of preparation
The condensed consolidated financial statements have been prepared in
accordance with the Disclosure and Transparency Rules of the Financial Conduct
Authority and in accordance with IAS 34 Interim Financial Reporting as
contained in UK-adopted international accounting standards. The condensed
consolidated financial statements should be read in conjunction with the
annual financial statements for the year ended 31 December 2024 which have
been prepared in accordance with UK-adopted International Accounting Standards
and with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards. The annual financial statements for the year
ended 31 December 2024 and the condensed consolidated financial statements
also comply fully with International Financial Reporting Standards (IFRSs) as
issued by the International Accounting Standards Board (IASB).
Going concern
The Directors have prepared Board-approved cash flow forecasts that
demonstrate that the Group has sufficient liquidity to meet its obligations as
they fall due for the period of at least 12 months from the date of approval
of these Financial Statements.
Additionally, the Directors have assessed a severe but plausible downside
scenario. The downside scenario includes a 20% revenue decline for 12 months
which is considerably worse than the actual impact of the COVID-19 pandemic in
2020. Following the issuance of $1.25bn bonds in H1 to finance the $700m Term
Loan maturity, headroom increased to approximately $1.9bn (excluding c.$100m
of cash subject to exchange controls) at June 2025. In the downside scenario,
the minimum headroom modelled was approximately $1.1bn (excluding c.$100m of
cash subject to exchange controls) before the inclusion of mitigating actions
(adjusting the level of M&A activity, and/or dividends paid) which are all
within the Group's control and were used during the COVID-19 pandemic.
The Directors have therefore concluded that the Group will have sufficient
liquidity to continue to meet its liabilities as they fall due for this period
and therefore have prepared the Consolidated Financial Statements on a going
concern basis.
Foreign currency translation
The results and financial position of Group entities are translated into the
presentation currency using the following rates for key currencies.
GBP balances were translated at a closing GBP/USD rate of 0.7290 (June 2024:
0.7915) and an average GBP/USD rate of 0.7706 (June 2024: 0.7900).
EUR balances were translated at a closing EUR/USD rate of 0.8497 (June 2024:
0.9338), and an average EUR/USD rate of 0.9183 (June 2024: 0.9242).
Change in presentation currency
On 25 July 2024, the Group announced that with effect from 1 January 2025 it
would be changing its presentation currency from sterling to US dollar. Within
the Group's current portfolio of businesses, sterling denominated earnings,
while sizeable, are a relatively small proportion of overall earnings. To
reduce the potential for foreign exchange volatility in our future reported
earnings, the Board determined that, with effect from 1 January 2025, the
Group will present its results in US dollar.
Accordingly, to satisfy the requirements of IAS 21 The Effects of Changes in
Foreign Exchange Rates, the reported results for the periods ended 30 June
2024, 31 December 2024 and 30 June 2025 have been translated from sterling to
US dollar using the following procedures:
● assets and liabilities denominated in non-US dollar currencies were translated
into US dollar at the relevant closing rates of exchange;
● the trading results of subsidiaries whose functional currency was other than
US dollar were translated into US dollar at the average rates of exchange for
the relevant period, with material items translated at the rate on the dates
of transaction;
● share capital, share premium, capital reduction reserve, and merger relief
reserve were translated at the historic rates prevailing on the date of each
transaction; and
● the cumulative translation reserve balance was set to nil on 1 January 2004,
the date of transition to IFRS, and has been represented on the basis that the
Group has reported in US dollar since that date.
A change in presentation currency represents a change in accounting policy
under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
which is accounted for retrospectively. The £/$ rates used for this exercise
are: average FY2024 1.2773, HY2024 1.2658; and closing FY2024 1.2519, HY2024
1.2635.
3. Accounting policies
The Group makes estimates and assumptions concerning the future. Estimates and
assumptions are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed
to be reasonable under the circumstances. Actual results may differ from these
estimates and revisions to estimates are recognised prospectively.
Sensitivities to the estimates and assumptions are provided, where relevant,
in the notes to the financial statements.
The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year are listed below:
● Termite damage claim provisions - Note 13
Further detail can be found in the Annual Report 2024.
Significant seasonal or cyclical variations in the Group's total revenues are
not experienced during the financial year.
Changes in accounting policies
Except as described below, the accounting policies applied in these interim
financial statements are the same as those applied in the Group's consolidated
financial statements as at and for the year ended 31 December 2024. The
changes in accounting policies are also expected to be reflected in the
Group's consolidated financial statements as at and for the year ending 31
December 2025.
The Group has adopted the following new standards and amendments to standards,
including any consequential amendments to other standards, with effect from 1
January 2025:
● Amendments to IAS 21 - Lack of exchangeability
The application of this amendments has had no material impact on the
disclosures of the amounts recognised in the Group's consolidated financial
statements. Consequently, no adjustment has been made to the comparative
financial information. The Group has not early adopted any standard,
interpretation or amendment that was issued but is not yet effective.
4. Segmental information
Segment reporting
Segmental information has been presented in accordance with IFRS 8 Operating
Segments below. The Group's reporting segments are regions and this reflects
management reporting structures and the way information is reviewed by the
Chief Operating Decision Maker (CODM) (the Chief Executive). The businesses
within each reporting segment operate in a number of different countries and
sell services across two business segments with the Workwear segment currently
held as a discontinued operation (see Note 6).
Following the acquisition of Terminix, the majority of the Group's activity is
in North America. With effect from 1 January 2025, the Group's reporting
structure has been changed to combine Europe incl. LATAM, UK & SSA,
Pacific and Asia & MENAT regions into a single reporting segment,
International. The Chief Executive remains as CODM and reviews the results on
a monthly basis for North America and International segments. All reporting to
the Board is also done on this basis. Comparative segmental financial
information for 2024 has been represented.
Disaggregated revenue under IFRS 15 is the same as the segmental analysis
presented below. Restructuring costs, one-off and adjusting items,
amortisation and impairment of intangible assets (excluding computer
software), and central and regional costs are presented at a Group level as
they are not targeted or managed at reportable segment level. The basis of
presentation is consistent with the information reviewed by management.
Revenue and profit from continuing operations
Continuing operations Revenue Revenue Operating Operating
30 June
30 June
profit
profit
2025
2024
30 June
30 June
$m
$m
2025
2024
$m
$m
North America
Pest Control 2,044 2,007 348 377
Hygiene & Wellbeing 62 60 8 8
2,106 2,067 356 385
International
Pest Control 747 710 153 145
Hygiene & Wellbeing 504 482 89 86
1,251 1,192 242 231
Total 3,357 3,259 598 616
Central and regional overheads 7 7 (85) (77)
Restructuring costs - - (2) (2)
Revenue and Adjusted Operating Profit 3,364 3,266 511 537
One-off and adjusting items (110) (47)
Amortisation and impairment of intangible assets (97) (110)
Operating profit 304 380
Analysis of revenue by type
Continuing operations Revenue Revenue
30 June
30 June
2025
2024
$m
$m
Contract service revenue 2,371 2,312
Job work 730 705
Sales of goods 263 249
Total 3,364 3,266
Other segment items included in the consolidated income statement are as
follows:
Continuing operations Amortisation and Amortisation and
impairment of
impairment of
intangibles
intangibles
30 June 2025
30 June 2024
$m
$m
North America 66 74
International 26 31
Central and regional 5 5
Total 97 110
5. Income tax expense
Analysis of charge in the period for continuing operations:
6 months to 30 June 2025 6 months to 30 June 2024
$m
$m
UK corporation tax at 25.0% (2024: 25.0%) 4 5
Overseas taxation 52 53
Adjustments in respect of prior periods (1) 8
Total current tax 55 66
Deferred tax expense (3) 8
Adjustments in respect of prior periods - (9)
Total deferred tax (3) (1)
Total income tax expense 52 65
Income tax expense for discontinued operations 9 7
The tax charge for the period has been calculated by applying the effective
tax rate which is expected to apply to the Group for the year ended 31
December 2025 using rates substantively enacted by 30 June 2025. A separate
effective income tax rate has been calculated for each jurisdiction in which
the Group operates, applied to the pre-tax profits for the interim period. The
following tax disclosures and rates are presented in respect of continuing
operations.
The reported tax rate for the period was 24.2% (June 2024: 22.0%). The Group's
Adjusted Effective Tax Rate (ETR) before amortisation of intangible assets
(excluding computer software), one-off items and the net interest adjustments
for the period was 25.0% (June 2024: 23.1%). This compares with a blended rate
of tax for the countries in which the Group operates of 25.2% (June 2024:
25.3%).
Total uncertain tax positions (including interest thereon) amounted to $45m as
at 30 June 2025 (December 2024: $44m). Included within this amount is $6m
(December 2024: $6m) in respect of interest arising on tax provisions, which
is included within other payables.
Total tax payments for the period amounted to $43m (June 2024: $36m), an
increase of $7m.
The Group is subject to Pillar 2 which aims to ensure all Group profits are
taxed in each jurisdiction at a minimum rate of 15%. The additional top up tax
charge for the Group is not expected to be significant, and for H1 2025 the
top up charge is expected to be less than $1m (June 2024: less than $1m).
The movement on the deferred income tax account is as follows:
6 months to 30 June 2025 6 months to 30 June 2024
$m
$m
At 1 January (597) (604)
Exchange differences (5) 3
Acquisitions of companies and businesses (2) (10)
Charged to the income statement - (1)
Credited/(charged) to other comprehensive income 12 (1)
Charged to equity (3) (1)
At 30 June (595) (614)
Deferred taxation for continuing operations has been presented on the balance
sheet as follows:
Deferred tax asset within non-current assets 51 61
Deferred tax liability within non-current liabilities (598) (675)
(547) (614)
Deferred taxation for discontinued operations has been presented on the
balance sheet as follows:
Deferred tax liability within liabilities classified as held for sale (48) -
(48) -
A deferred tax asset of $48m has been recognised in respect of losses
(December 2024: $51m), of which $34m (December 2024: $38m) relates to UK
losses carried forward at 30 June 2025. This amount has been calculated by
estimating the future UK taxable profits, against which the UK tax losses will
be utilised, progressively risk weighted, and applying the tax rates
(substantively enacted as at the balance sheet date) applicable for each year.
Deferred tax is fully recognised on UK tax losses (excluding capital losses)
as at 30 June 2025 as it is considered probable that future taxable profits
will be available against which the tax losses can be offset.
At the balance sheet date the Group had tax losses of $329m (December 2024:
$303m) on which no deferred tax asset is recognised because it is not
considered probable that future taxable profits will be available in certain
jurisdictions to be able to benefit from those tax losses.
On 4 July 2025, the "One Big Beautiful Bill Act" (OBBBA) was signed by
President Trump, making significant changes to US federal tax policy. The
Group is still evaluating the impact of this bill and currently does not
anticipate any material impact on its post tax earnings.
6. Discontinued operations
On 28 May 2025, the Group announced that it has entered into an agreement for
the intended sale of its Workwear business in France with H.I.G. Capital (the
'proposed transaction'), for which approval was granted by the European
Commission on 25 July 2025.
The proposed transaction values France Workwear at a gross enterprise value of
approximately €410m (c.$465m), on a cash-free, debt-free basis, including an
earn-out mechanism with a maximum value of €30m (c.$34m), linked to the
performance of the business in 2026. Total net cash proceeds are expected to
be approximately €370m (c.$420m), subject to customary closing adjustments
and the final earn-out outcome. Completion of the proposed transaction is
expected to occur in Q4 2025.
Financial information relating to the discontinued operations for the period
is set out below:
Unaudited Unaudited
6 months to
6 months to
30 June
30 June
2025
2024
$m
$m
Revenue 168 159
Operating expenses (133) (131)
Net impairment losses on financial assets - (1)
Operating profit 35 27
Finance cost (2) (1)
Profit before income tax 33 26
Income tax expense (9) (7)
Profit from discontinued operations 24 19
Profit for the period attributable to:
Equity holders of the Company 24 19
Non-controlling interests - -
Other comprehensive income:
Items that may be reclassified subsequently to the income statement:
Net exchange adjustments offset in reserves 19 (8)
Other comprehensive income for the period 19 (8)
Total comprehensive income for the period 43 11
Total comprehensive income for the period attributable to:
Equity holders of the Company 43 11
Non-controlling interests - -
Earnings per share attributable to the Company's equity holders:
Basic (cents) 0.95 0.76
Diluted (cents) 0.94 0.75
Net cash generated from operating activities 57 55
Net cash flows from investing activities (47) (44)
Net cash flows from financing activities (4) (4)
Net increase in cash generated by discontinued operations 6 7
A non-current asset or a disposal group is classified as held for sale if its
carrying amount will be recovered principally through sale rather than through
continuing use, it is available for immediate sale, and sale is highly
probable within one year.
On initial classification as held for sale, non-current assets and disposal
groups are measured at the lower of previous carrying amount and fair value
less costs to sell with any adjustments taken to profit or loss, with the
exception of inventories, financial assets, deferred tax assets and employee
benefit assets, which continue to be measured in accordance with the Group's
accounting policies. There were no impairments to the disposal group in the
period to 30 June 2025. Intangible assets and property, plant and equipment
once classified as held for sale or distribution are not amortised or
depreciated.
Net assets of disposal group held for sale
At 30 June
2025
$m
Assets held for sale
Intangible assets 7
Property, plant and equipment 265
Right-of-use assets 21
Contract costs 20
Inventories 12
Trade and other receivables 75
Cash and cash equivalents 13
413
Liabilities held for sale
Trade and other payables (109)
Lease liabilities (21)
Deferred and current tax (54)
Retirement benefit obligations (7)
Provisions (11)
(202)
Net assets held for sale 211
The cumulative foreign exchange losses recognised in other comprehensive
income in relation to the discontinued operation as at 30 June 2025 were $48m.
7. Dividends
Dividend distribution to the Company's shareholders is recognised as a
liability in the Group's financial statements in the period in which the
dividends are approved by the Company's shareholders. Interim dividends are
recognised when paid.
6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
2023 final dividend paid - 7.41 cents per share(1) - 186
2024 final dividend paid - 7.91 cents per share(1) 198 -
Total 198 186
1. Represented at exchange rate prevailing at AGM's date (2024 - 5.93 pence
per share; 2023 - 5.93 pence per share)
The directors have declared an interim dividend of 4.15 cents per share
amounting to $105m payable on 22 September 2025 to shareholders on the
register at close of business on 15 August 2025. The last day for DRIP
elections is 1 September 2025. These interim financial statements do not
reflect this dividend payable.
8. Business combinations
During the period the Group purchased 100% of the share capital or trade and
assets of 18 companies and businesses (2024: 23). An overview of the
acquisitions in the year can be found under the 'Good contributions from
Bolt-on M&A' heading. The Group acquires companies and businesses as part
of its growth strategy.
The total consideration in respect of these acquisitions was $68m (2024:
$143m). The provisional fair values of assets and liabilities arising from
acquisitions will be finalised within 12 months of the dates of acquisition.
Details of goodwill and the provisional fair value of net assets acquired in
the period are as follows:
6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Purchase consideration
- Cash paid 55 74
- Deferred and contingent consideration 13 69
Total purchase consideration 68 143
Provisional fair value of net assets acquired (19) (50)
Goodwill from current-period acquisitions 49 93
Goodwill represents the synergies and other benefits expected to be realised
from integrating acquired businesses into the Group, such as improved route
density, expansion in use of best-in-class digital tools and back office
synergies.
Deferred consideration of $7m and contingent consideration of $6m are payable
in respect of the above acquisitions (2024: $37m and $32m respectively).
Contingent consideration is payable based on a variety of conditions including
revenue and profit targets being met. During the period $10m (2024: $nil) of
contingent consideration liabilities were released.
The provisional fair values of assets and liabilities arising from
acquisitions in the period are as follows:
6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Non-current assets
- Intangible assets(1) 19 56
- Property, plant and equipment 2 6
Current assets 3 16
Current liabilities (2) (10)
Non-current liabilities (3) (18)
Net assets acquired 19 50
1. Includes $19m (2024: $51m) of customer lists and $nil (2024: $5m) of other
intangibles.
Acquired receivables are disclosed at fair value and represent the best
estimate of the contractual cash flows expected to be collected.
From the dates of acquisition to 30 June 2025, these acquisitions contributed
$7m to revenue and $nil to operating profit (2024: $21m and $1m respectively)
for continuing operations. If the acquisitions had occurred on 1 January 2025,
the revenue and operating profit of the Group, including discontinued
operations, would have amounted to $3,542m and $341m respectively (2024:
$3,453m and $407m respectively).
The Group paid $15m in respect of deferred and contingent consideration for
current and prior year acquisitions (2024: $23m), resulting in the total cash
outflow in the period from current and past period acquisitions, net of $nil
(2024: $1m) cash acquired, of $70m (2024: $96m).
9. Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the Group's share of the net identifiable assets of the acquired
business at the date of acquisition. It is recognised as an intangible asset.
Goodwill arising on the acquisition of an associate is included in investments
in associates.
Goodwill is carried at cost less accumulated impairment losses and is tested
annually for impairment. For the purpose of impairment testing, goodwill is
allocated to cash-generating unit (CGU) groups identified according to region
of operation and reportable business unit.
At the start of the period, management reviewed its grouping of CGUs and its
allocation of goodwill for the purposes of assessing impairment based on the
lowest level at which the goodwill is monitored. Based on this review,
management has determined that the Group now has six CGU groups. These are
North America, UK & SSA, Europe, LATAM, Asia & MENAT and Pacific. The
key factors considered in management's conclusion included the change in
reporting segments to North America and International, to reflect the high
proportion of business in the US, and the subsequent allocation of resources
based on the results for each operating segment.
Before initiating the change in CGU grouping, in accordance with IAS 36,
management performed a value-in-use impairment test on the pre-existing CGU
groups and determined there to be no impairment of goodwill within any of the
groups.
The recoverable amount of a CGU group is determined based on the higher of
value-in-use calculations using cash flow projections and fair value less
costs to sell, if appropriate. The cash flow projections in year one are based
on financial budgets approved by the board, which are prepared as part of the
Group's normal planning process. Cash flows for years two to five use the
group expectation of sales growth, operating costs and margin, based on past
experience and expectations regarding future performance and profitability for
each CGU group. Cash flows beyond the five-year period are extrapolated using
estimated long-term growth rates.
An assessment has been performed for all material CGU groups at the half year
to identify any possible indicators of impairment. The assessment included a
review of internal and external factors that have the potential to
significantly reduce the CGU group value. The indicator assessment resulted in
no CGU groups showing indicators of impairment.
10. Net debt
Reconciliation of net change in cash and cash equivalents to net debt for
continuing operations:
At 30 At 31
June
December
2025
2024
$m
$m
Current
Cash and cash equivalents in the Consolidated Balance Sheet 1,689 1,158
Other investments 2 1
Fair value of debt-related derivatives 61 (4)
Bank and other short-term borrowings¹ (1,309) (1,460)
Lease liabilities (166) (163)
277 (468)
Non-current
Fair value of debt-related derivatives 77 (28)
Bank and other long-term borrowings² (4,178) (3,127)
Lease liabilities (388) (394)
(4,489) (3,549)
Total net debt (4,212) (4,017)
1. Bank and other short-term borrowings consists of $588m bond debt (2024:
$nil), $677m overdraft (2024: $693m), $28m loans (2024: $719m) and $16m bond
accruals (2024: $48m).
2. Bank and other long-term borrowings consists of $4,176m bond debt (2024:
$3,122m) and $2m loans (2024: $5m).
Fair value is equal to carrying value for all elements of net debt with the
exception of bond debt which has a carrying value of $4,764m (December 2024:
$3,122m) and a fair value of $4,822m (December 2024: $3,104m).
Cash at bank and in hand includes $24m (December 2024: $20m) of restricted
cash. This cash is held in respect of specific contracts and can only be
utilised in line with terms under the contractual arrangements.
11. Derivative financial instruments
All financial instruments held at fair value are classified by reference to
the source of inputs used to derive the fair value. The following hierarchy is
used:
Level 1 - unadjusted quoted prices in active markets for identical assets or
liabilities;
Level 2 - inputs other than quoted prices that are observable for the asset or liability
either directly as prices or indirectly through modelling based on prices; and
Level 3 - inputs for the asset or liability that are not based on observable market
data.
Financial instrument Hierarchy level Valuation method
Financial assets traded in active markets 1 Current bid price
Financial liabilities traded in active markets 1 Current ask price
Listed bonds 1 Quoted market prices
Money market funds 1 Quoted market prices
Interest rate/currency swaps 2 Discounted cash flow based on market swap rates
Forward foreign exchange contracts 2 Forward exchange market rates
Borrowings not traded in active markets (term loans and uncommitted 2 Nominal value
facilities)
Money market deposits 2 Nominal value
Trade payables and receivables 2 Nominal value less estimated credit adjustments
Contingent consideration (including put option liability) 3 Discounted cash flow using WACC
Fair value Fair value Fair value Fair value
assets
assets
liabilities
liabilities
30 June 2025
31 December 2024
30 June 2025
31 December 2024
$m
$m
$m
$m
Interest rate swaps (level 2):
- cash flow hedge 16 29 (22) (24)
- net investment hedge 168 1 (6) (34)
- fair value hedge - - (25) -
Foreign exchange swaps (level 2):
- non-hedge 8 - (1) (4)
192 30 (54) (62)
Analysed as follows:
Current portion 71 - (10) (4)
Non-current portion 121 30 (44) (58)
Derivative financial instruments 192 30 (54) (62)
( ) ( )
Contingent consideration (including put option liability) (level 3)(1) (83) (107)
Analysed as follows:
Current portion (47) (43)
Non-current portion (36) (64)
Other payables (83) (107)
1. Contingent consideration includes put option liability of $31m (December
2024: $33m).
Certain interest rate swaps have been bifurcated to manage different foreign
exchange risks. The interest rate swaps are shown on the balance sheet as net
derivative assets of $181m (December 2024: $8m) and net derivative liabilities
$43m (December 2024: $40m).
Given the volume of acquisitions and the variety of inputs to the valuation of
contingent consideration (depending on each transaction) there is not
considered to be any change in input that would have a material impact on the
contingent consideration liability.
Contingent Contingent
consideration
consideration
30 June 2025
30 June 2024
$m
$m
At 1 January 94 97
Exchange differences 4 (2)
Acquisitions 7 32
Payments (11) (19)
Unused amounts reversed (10) -
Revaluation of put option through equity (1) (1)
83 107
Fair value is equal to carrying value for all other trade and other payables.
12. Analysis of bank and bond debt
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are classified as current liabilities unless the Group
has a continuing right to defer settlement of the liability for at least 12
months after the balance sheet date.
The Group's bank debt comprises:
Facility Drawn at Headroom Interest rate
amount
period end
at 30 June
at period
at 30 June
at 30 June
2025
end
2025
2025
$m
at 30 June
$m
$m
2025
%
Non-current
$1.0bn RCF due October 2029 1,000 - 1,000 0.14
Facility Drawn at Headroom Interest rate
amount
period end
at 31
at period
at 31
at 31
December
end
December
December
2024
at 31
2024
2024
$m
December
$m
$m
2024
%
Current
$700m term loan due October 2025 700 700 - 5.94
Non-current
$1.0bn RCF due October 2029 1,000 - 1,000 0.14
The Group has a committed $1.0bn revolving credit facility (RCF) which is
available for cash drawings up to $1.0bn. The maturity date is October 2029.
As at 30 June 2025 the facility was undrawn (2024: undrawn).
During April 2025, the Group issued new bonds totalling $1.25bn, consisting of
$750m due 2030 and $500m due 2035. Part of proceeds was used to settle the
$700m term loan.
Medium-term notes and bond debt comprises:
Bond interest Effective hedged
coupon
interest rate
2025
2025
Current
€500m bond due May 2026 Fixed 0.875% Fixed 2.73%
Non-current
€850m bond due June 2027 Fixed 3.875% Fixed 4.74%
€600m bond due October 2028 Fixed 0.500% Fixed 2.17%
$750m bond due April 2030 Fixed 5.000% Fixed 5.20%
€600m bond due June 2030 Fixed 4.375% Fixed 4.41%
£400m bond due June 2032 Fixed 5.000% Fixed 5.19%
$500m bond due April 2035 Fixed 5.625% Fixed 5.73%
Average cost of bond debt at period-end rates 4.33%
The effective hedged interest rate reflects the interest rate payable after
the impact of interest due from cross-currency and interest-rate swaps. The
Group's hedging strategy is to hold foreign currency debt in proportion to
foreign currency profit and cash flows, which are mainly in US dollar and
euro. As a result, the Group has swapped a portion of the euro denominated
bonds issued into US dollars, thus increasing the effective hedged interest
rate.
The Group has no significant concentration of credit risk. At 30 June 2025 the
Group had a total of $26m of cash held on bank accounts with banks rated below
A- by S&P (30 June 2024: $23m). The highest concentration with any single
bank rated below A- was $5m (30 June 2024: $4m).
The Group considers the fair value of other current liabilities to be equal to
the carrying value.
13. Provisions for liabilities and charges
The Group has provisions for termite damage claims, self-insurance,
environmental, and other. Provisions are recognised when the Group has a
present obligation as a result of past events, it is probable that an outflow
of resources will be required to settle the obligation, and the amount is
capable of being reliably estimated. If such an obligation is not capable of
being reliably estimated it is classified as a contingent liability.
Termite Self Environmental Other Total
damage
insurance
$m
$m
$m
claims
$m
$m
At 31 December 2024 266 231 17 11 525
At 1 January 2025 266 231 17 11 525
Exchange differences - 1 1 1 3
Additional provisions 79 52 - 4 135
Used during the period (52) (37) (1) (5) (95)
Unused amounts reversed - - - (1) (1)
Unwinding of discount on provisions 6 - - - 6
Transferred to liabilities held for sale - - (11) - (11)
At 30 June 2025 299 247 6 10 562
At 30 At 31
June
December
2025
2024
Total
Total
$m
$m
Analysed as follows:
Non-current 404 381
Current 158 144
Total 562 525
Termite damage claims
The Group holds provisions for termite damage claims covered by contractual
warranties. Termite damage claim provisions are subject to significant
assumptions and estimation uncertainty. The assumptions included in valuing
termite provisions are based on an estimate of the volume and value of future
claims (based on historical and forecast information), customer churn rates
and discount rates. These provisions are expected to be substantially utilised
within the next 16 years at a declining rate. The trend of volume and value of
claims is monitored and reviewed over time (with the support of external
advisers) and as such the value of the provision is also likely to change.
The Group's provision relates to legacy claims (from the period prior to the
acquisition of Terminix), estimated at $276m (2024: $246m) and new customer
claims, estimated at $23m (2024: $20m). The sensitivity of the legacy
liability balance to changes in the inputs is illustrated as follows:
● Discount rate - The exposure to termite damage claims is largely based within
the United States, therefore measurement is based on a seven-year US bond
risk-free rate. During the period, interest rates (and therefore discount
rates) have decreased. Rates could move in either direction and management has
modelled that an increase/decrease of 50bps in yields would decrease/increase
the provision by $7m (2024: $6m). Over the 6 months to 30 June 2025,
seven-year risk-free rate yields have decreased from 4.48% to 3.98%.
● Claim value - Claim value forecasts have been based on the latest available
historical settled Terminix claims. Claims values are dependent on a range of
inputs including labour cost, materials costs (e.g. timber), whether a claim
becomes litigated or not, and specific circumstances including contributory
factors at the premises. Management has used an average of claim costs for the
last 12 months for non-litigated claims and 24 months for litigated claims,
adjusted where necessary to account for ageing of claims, to determine an
estimate for costs per claim. Recent fluctuations in input prices (e.g. timber
prices) means that there is potential for volatility in claim values and
therefore future material changes in provisions. Management has modelled that
an increase/decrease of 5% in litigated claim values would increase/decrease
the provision by c.$5m (2024: $4m) and an increase/decrease of 5% in
non-litigated claim values would increase/decrease the provision by c.$8m
(2024: $8m). Over the 6 months to 30 June 2025, costs per litigated claim rose
by c.18% (2024: 8%) and non-litigated costs rose by 13% (2024: 45%). Actual
value of claims settled in the period to June 2025 has been at a combined cost
per claim 9% higher than that seen throughout 2024. This is not representative
of management's expectation of future costs as ageing of claims, which drives
an increased cost per claim, has reduced in recent months and is expected to
continue to improve.
● Claim rate - Management has estimated claim rates based on statistical
historical incurred claims. Data has been captured, to establish incidence
curves that can be used to estimate likely future cash outflows. Changes in
rates of claim are largely outside the Group's control and may depend on
litigation trends within the US, and other external factors such as how often
customers move property and how well they maintain those properties. This
causes estimation uncertainty that could lead to material changes in provision
measurement. Management has modelled that an increase/decrease of 5% in
litigated claim rates would increase/decrease the provision by c.$5m (2024:
$4m) and an increase/decrease of 5% in non-litigated claim rates would
increase/decrease the provision by c.$8m (2024: $8m) accordingly. Over the 6
months to 30 June 2025,the assumption for litigated claim rates rose by 43%
(2024: fell 52%) and non-litigated claim rates fell by 5% (2024: rose 7%).
● Customer churn rate - If customers choose not to renew their contracts each
year, then the assurance warranty falls away. As such there is sensitivity to
the assumption on how any customers will churn out of the portfolio of
customers each year. Data has been captured and analysed to establish
incidence curves for customer churn, and forward-looking assumptions have been
made based on these curves. Changes in churn rates are subject to
macroeconomic factors and to the performance of the Group. A 1% movement in
customer churn rates, up or down, would change the provision by c.$13m up or
down (2024: $9m), accordingly. On average over the last 10 years churn rates
have moved by +/- c.2.0% per annum.
Self-insurance
The Group purchases external insurance from a portfolio of international
insurers for its key insurable risks. In order to help mitigate the cost of
external insurance, the Group self-insures a level of cover on its major
insurance policies. Self-insurance provisions represent obligations for open
claims, and also incurred but not reported (IBNR) losses. External actuaries
are used to help management estimate the provisions held at the balance sheet
date. Due to the nature of the claims, the timing of utilisation of these
provisions is uncertain.
Self-insurance provisions are also subject to estimation uncertainty based on
volume and value of expected future claims and discount rate assumptions;
however, it is not expected that there would be any change to assumptions that
would cause a significant adjustment to the carrying value in the next
financial year.
Environmental
The Group owns, or formerly owned, a number of properties in Europe and the US
where environmental contamination is being managed. These issues tend to be
complex to determine and resolve and may be material, although it is often not
possible to accurately predict future costs of management or remediation
reliably. Provisions are held where liability is probable and costs can be
reliably estimated. Contingent liabilities exist where the conditions for
recognising a provision under IAS 37 have not been met. The Group monitors
such properties to determine whether further provisions are necessary. The
provisions that have been recognised are expected to be substantially utilised
within the next five years with the exception of the $11m provision which was
reclassified to liabilities held for sale.
Other
Other provisions principally comprise amounts required to cover obligations
arising and costs relating to disposed businesses and restructuring costs.
Other provisions also includes costs relating to onerous contracts and
property dilapidations settlements. Existing provisions are expected to be
substantially utilised within the next five years.
14. Post balance sheet events
There have been no significant post balance sheet events affecting the Group
since 30 June 2025.
Other information
Use of non-IFRS measures
The Group uses a number of non-IFRS measures to present the financial
performance of the business. These are not measures as defined under IFRS, but
management believe that these measures provide valuable additional information
for users of the Financial Statements, in order to better understand the
underlying trading performance from activities that will contribute to future
performance. The Group's internal strategic planning process is also based on
these measures and they are used for management incentive purposes. They
should be viewed as complements to, and not replacements for, the comparable
IFRS measures. Other companies may use similarly labelled measures which may
be calculated differently to the way the Group calculates them, which limits
their usefulness as comparative measures. Accordingly, investors should not
place undue reliance on these non-IFRS measures.
The following sets out an explanation and the reconciliation to the nearest
IFRS measure for each non-IFRS measure. All non-IFRS measures exclude
discontinued operations unless explicitly stated otherwise.
Constant exchange rates (CER)
Given the international nature of the Group's operations, foreign exchange
movements can have a significant impact on the reported results of the Group
when they are translated into US dollar (the presentation currency of the
Group).
In order to help understand the underlying trading performance of the
business, revenue and profit measures are often presented at constant exchange
rates. CER is calculated by translating prior-year reported numbers at the
average exchange rates for the current year. This represents a change from
prior periods in which CER was calculated by a translation of current-year
reported numbers at the average exchange rates for the prior year. It is used
to give management and other users of the accounts clearer comparability of
underlying trading performance against the prior period by removing the
effects of changes in foreign exchange rates. The major exchange rates used to
calculate CER in 2025 are $/€ 0.9183 and $/£ 0.7706.
Comparisons are to the six months ended 30 June 2024 (H1 2024) unless
otherwise stated.
Organic Revenue Growth
Acquisitions are a core part of the Group's growth strategy. The Organic
Revenue Growth measures (absolute and percentage) are used to help investors
and management understand the underlying performance of the business, by
identifying Organic Revenue Growth separately from the impact of Acquired
Revenue. This approach isolates changes in performance of the Group that take
place under the Company's stewardship, and thereby reflects the potential
benefits and risks associated with owning and managing a professional services
business.
Organic Revenue Growth is calculated based on year-over-year revenue growth at
CER to eliminate the effects of movements in foreign exchange rates.
Acquired Revenue represents a 12-month estimate of the increase in Group
revenue from each business acquired. Acquired Revenue is calculated as: a) the
revenue from the acquisition date to the year end in the year of acquisition
in line with IFRS 3; and b) the pre-acquisition revenues from 1 January up to
the acquisition date in the year of acquisition. The pre-acquisition revenue
is based on the previously reported revenues of the acquired entity and is
considered to be an estimate.
In the year a business is acquired, all of its revenue reported under a) above
is classified as non-organic growth. In the subsequent first full financial
year after acquisition, Organic Revenue Growth is calculated for each
acquisition as the reported revenue less Acquired Revenue.
At a Group level, calculating Organic Revenue Growth therefore involves
isolating and excluding from the total year-over-year revenue change: i) the
impacts from foreign exchange rate changes, ii) the growth in revenues that
have resulted from completed acquisitions in the current period, and iii) the
estimate of pre-acquisition revenues from each business acquired. The sum of
ii) and iii) is equal to the total Acquired Revenues for all acquisitions. The
calculated Organic Revenue is expressed as a percentage of prior year revenue.
Prior year revenue is not 'pro-forma' adjusted in the calculation, as any such
estimated adjustments would have an immaterial impact.
If an acquisition is considered to be a material transaction, the above
calculation is amended in order to give a 'pro-forma' view of any Organic
Revenue Growth for the full financial year in the year of acquisition, as if
the acquisition had been part of the Group from the beginning of the prior
year. The pro-forma calculation is completed using pre-acquisition revenues to
normalise current and prior periods as shown in the table below. These revenue
normalisations are considered estimates, and ensure that the potentially
larger Organic Revenue Growth is measured over a denominator that includes the
material acquisition.
While management believes that the methodology used in the calculation of
Organic Revenue is representative of the performance of the Group, the
calculations may not be comparable to similarly labelled measures presented by
other publicly traded companies in similar or other industries.
Continuing operations North International Central Total
America
$m
$m
$m
$m
2024 Revenue 2,067 1,192 7 3,266
2024 Exchange differences (2) (2) - (4)
2024 Revenue (at CER) 2,065 1,190 7 3,262
2024 Revenue from closed businesses(1) (18) - - (18)
Normalised 2024 Revenue (at CER) - base for Organic Revenue Growth percentage 2,047 1,190 7 3,244
Revenue from 2025 acquisitions² 4 4 - 8
Revenue from 2024 acquisitions (at CER)³ 33 26 - 59
Organic Revenue Growth 2025 22 31 - 53
2025 Revenue (at AER) 2,106 1,251 7 3,364
Organic Revenue Growth %(4) 1.1% 2.7% (9.2)% 1.6%
1. The adjustment removes revenue from 1 January 2024 to 31 March 2024 from
the Paragon distribution business, closed with effect from 1 April 2024.
2. Revenue from completed acquisitions in the current period.
3. Estimate of revenue from each business acquired by the Group in the
previous financial year through to the 12-month anniversary of the Group's
ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all entities in
the Group's continuing operations as at 30 June 2024.
Continuing operations North International Central Total
America
$m
$m
$m
$m
2023 Revenue 2,044 1,103 7 3,154
2023 Exchange differences (2) (10) - (12)
2023 Revenue (at CER) 2,042 1,093 7 3,142
2023 Revenue from closed businesses(1) (17) - - (17)
Normalised 2023 Revenue (at CER) - base for Organic Revenue Growth percentage 2,025 1,093 7 3,125
Revenue from 2024 acquisitions² 2 19 - 21
Revenue from 2023 acquisitions (at CER)³ 14 22 36
Organic Revenue Growth 2024 24 56 - 80
Exchange differences 2 2 - 4
2024 Revenue (at AER) 2,067 1,192 7 3,266
Organic Revenue Growth %(4) 1.3% 4.9% 8.0% 2.6%
1. The adjustment removes revenue from 1 April 2023 to 30 June 2023 from the
Paragon distribution business, closed with effect from 1 April 2024.
2. Revenue from completed acquisitions in the current period.
3. Estimate of revenue from each business acquired by the Group in the
previous financial year through to the 12-month anniversary of the Group's
ownership.
4. Organic Revenue Growth includes Organic Revenue Growth for all entities in
the Group's continuing operations as at 30 June 2023.
Adjusted expenses and profit measures
Adjusted expenses and profit measures are used to give investors and
management a further understanding of the underlying profitability of the
business over time by stripping out income and expenses that can distort
results due to their size and nature. Adjusted profit measures are calculated
by adding the following items back to the equivalent IFRS profit measure:
• amortisation and impairment of intangible assets (excluding computer
software);
• one-off and adjusting items; and
• net interest adjustments.
Intangible assets (such as customer lists and brands) are recognised on
acquisition of businesses which, by their nature, can vary by size and amount
each year. Capitalisation of innovation-related development costs will also
vary from year to year. As a result, amortisation of intangibles is added back
to assist with understanding the underlying trading performance of the
business and to allow comparability across regions and categories.
One-off and adjusting items are significant expenses or income that will have
a distortive impact on the underlying profitability of the Group. Typical
examples are costs related to the acquisition of businesses, gain or loss on
disposal or closure of a business, material gains or losses on disposal of
fixed assets, adjustments to legacy environmental and legacy termite
liabilities, and payments or receipts as a result of legal disputes. A summary
of one-off and adjusting items is set out below.
Net interest adjustments are other non-cash or one-off accounting gains and
losses that can cause material fluctuations and distort understanding of the
performance of the business, such as amortisation of discount on legacy
provisions and gains and losses on hedge accounting.
Adjusted expenses are one-off and adjusting items, and Adjusted Interest.
Adjusted profit measures used are Adjusted Operating Profit, Adjusted Profit
Before and After Tax, and Adjusted EBITDA. Adjusted Earnings Per Share is also
reported, derived from Adjusted Profit After Tax.
One-off and adjusting items
One-off and adjusting items of $110m (2024: $47m) includes an increase to the
provision for Termite Damage claims of $79m (2024:$nil), $30m (2024: $39m) of
integration costs related to the Terminix acquisition and a net $1m (2024:
$8m) of other M&A costs.
Adjusted Interest
Adjusted Interest is calculated by adjusting the reported finance income and
costs by net interest adjustments (amortisation of discount on legacy
provisions and foreign exchange and hedge accounting ineffectiveness).
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Finance cost 117 122
Finance income (24) (31)
Add back:
Amortisation on discount of legacy provisions (6) (5)
Foreign exchange and hedge accounting ineffectiveness 11 (3)
Adjusted Interest 98 83
Adjusted Operating Profit
Adjusted Operating Profit is calculated by adding back one-off and adjusting
items, and amortisation and impairment of intangible assets excluding computer
software to operating profit.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Operating profit 304 380
Add back:
One-off and adjusting items 110 47
Amortisation and impairment of intangible assets 97 110
Adjusted Operating Profit 511 537
Adjusted Profit Before and After Tax
Adjusted Profit Before Tax is calculated by adding back net interest
adjustments, one-off and adjusting items, and amortisation and impairment of
intangible assets to profit before tax. Adjusted Profit After Tax is
calculated by adding back net interest adjustments, one-off and adjusting
items, amortisation and impairment of intangible assets excluding computer
software, and the tax effect on these adjustments to profit after tax.
6 months to 30 June 2025
Continuing operations IFRS Net interest One-off Amortisation Non-IFRS
measures
adjustments
and
and
measures
$m
$m
adjusting
impairment of
$m
items
intangibles
$m
$m
Profit before income tax 216 (5) 110 97 418 Adjusted Profit Before Tax
Income tax expense (52) 1 (28) (25) (104) Tax on Adjusted Profit
Profit for the period 164 (4) 82 72 314 Adjusted Profit After Tax
6 months to 30 June 2024
Continuing operations IFRS Net interest One-off Amortisation Non-IFRS
measures
adjustments
and
and
measures
$m
$m
adjusting
impairment of
$m
items
intangibles
$m
$m
Profit before income tax 294 8 47 110 459 Adjusted Profit Before Tax
Income tax expense (65) (2) (12) (27) (106) Tax on Adjusted Profit
Profit for the period 229 6 35 83 353 Adjusted Profit After Tax
EBITDA and Adjusted EBITDA
EBITDA is calculated by adding back finance income, finance cost, share of
profit from associates net of tax, income tax expense, depreciation,
amortisation and impairment of intangible assets excluding computer software
and other non-cash expenses to profit for the year. Adjusted EBITDA is
calculated by adding back one-off and adjusting items to EBITDA.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Profit for the period 164 229
Add back:
Finance income (24) (31)
Finance cost 117 122
Share of profit from associates net of tax (5) (5)
Income tax expense 52 65
Depreciation 158 153
Other non-cash expenses 17 17
Amortisation and impairment of intangible assets 97 110
EBITDA 576 660
One-off and adjusting items 110 47
Adjusted EBITDA 686 707
EBITDA attributable to discontinued operations 70 67
EBITDA for the Group 646 727
Adjusted EBITDA attributable to discontinued operations 70 67
Adjusted EBITDA for the Group 756 774
Adjusted Earnings Per Share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of shares in
issue during the year, and is explained in Note A2 to the Consolidated
Financial Statements in the 2024 Annual Report. Adjusted Earnings Per Share is
calculated by dividing adjusted profit from continuing operations attributable
to equity holders of the Company by the weighted average number of ordinary
shares in issue and is shown below.
For Adjusted Diluted Earnings Per Share, the weighted average number of
ordinary shares in issue is adjusted to include all potential dilutive
ordinary shares. The Group's potentially dilutive ordinary shares are
explained in Note A2 to the Consolidated Financial Statements in the 2024
Annual Report.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Profit attributable to equity holders of the Company 164 229
Add back:
Net interest adjustments (5) 8
One-off and adjusting items 110 47
Amortisation and impairment of intangibles(1) 97 110
Tax on above items(2) (51) (41)
Adjusted profit attributable to equity holders of the Company 315 353
Weighted average number of ordinary shares in issue (million) 2,522 2,521
Adjustment for potentially dilutive shares (million) 9 9
Weighted average number of ordinary shares for diluted earnings per share 2,531 2,530
(million)
Basic Adjusted Earnings Per Share (cents) 12.46 14.00
Diluted Adjusted Earnings Per Share (cents) 12.41 13.95
1. Excluding computer software.
2. The tax effect on add-backs is as follows: one-off and adjusting items $28m
(2024: $12m); amortisation and impairment of intangibles $25m (2024: $27m);
and, net interest adjustments $(1)m (2024: $2m).
Adjusted cash measures
The Group aims to generate sustainable cash flow in order to support its
acquisition programme and to fund dividend payments to shareholders.
Management considers that this is useful information for investors. Adjusted
cash measures in use are Free Cash Flow, Adjusted Free Cash Flow, and Adjusted
Free Cash Flow Conversion.
Free Cash Flow
Free Cash Flow is measured as net cash flows from operating activities,
adjusted for cash flows related to the purchase and sale of property, plant,
equipment and intangible assets, cash flows related to leased assets, cash
flows related to one-off and adjusting items and dividends received from
associates. These items are considered by management to be non-discretionary,
as continued investment in these assets is required to support the day-to-day
operations of the business. Free Cash Flow is used by management for incentive
purposes and is a measure shared with and used by investors.
A reconciliation of net cash flows from operating activities in the
Consolidated Cash Flow Statement to Free Cash Flow is provided in the table
below.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Net cash flows from operating activities 412 337
Purchase of property, plant, equipment (62) (62)
Purchase of intangible assets (27) (27)
Capital element of lease payments and initial direct costs incurred (90) (87)
Proceeds from sale of property, plant, equipment and software 1 2
Cash impact of one-off and adjusting items 48 52
Free Cash Flow 282 215
Free Cash flow attributable to discontinued operations 6 7
Free Cash Flow for the Group including discontinued operations 288 222
Adjusted Free Cash Flow and Adjusted Free Cash Flow Conversion
Adjusted Free Cash Flow Conversion is provided to demonstrate to investors the
proportion of Adjusted Profit After Tax that is converted to cash. It is
calculated by dividing Adjusted Free Cash Flow by Adjusted Profit After Tax,
expressed as a percentage. Adjusted Free Cash Flow is measured as Free Cash
Flow adjusted for product development additions and net investment hedge cash
interest through Other Comprehensive Income. Product development additions are
adjusted due to their variable size and non-underlying nature. Net investment
hedge cash interest through Other Comprehensive Income is adjusted because the
cash relates to an item that is not recognised in Adjusted Profit After Tax.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Free Cash Flow 282 215
Product development additions 6 6
Net investment hedge cash interest through Other Comprehensive Income 3 8
Adjusted Free Cash Flow (a) 291 229
Adjusted Profit After Tax (b) 314 353
Free Cash Flow conversion (a/b) 92.6% 64.8%
Free Cash Flow conversion attributable to discontinued operations 31.58% 35.00%
Free Cash Flow conversion for the Group 89.1% 63.2%
The nearest IFRS-based equivalent measure to Adjusted Free Cash Flow
Conversion would be Cash Conversion, which is shown in the table below to
provide a comparison in the calculation. Cash Conversion is calculated as net
cash flows from operating activities divided by profit attributable to equity
holders of the Company, expressed as a percentage. Management considers that
this is useful information for investors as it gives an indication of the
quality of profits, and ability of the Group to turn profits into cash flows.
Continuing operations 6 months to 6 months to
30 June
30 June
2025
2024
$m
$m
Net cash flows from operating activities (a) 412 337
Profit attributable to equity holders of the Company (b) 171 229
Cash Conversion (a/b) 240.94% 147.16%
Cash Conversion attributable to discontinued operations 237.50% 289.47%
Cash Conversion for the Group 240.51% 157.00%
Adjusted Effective Tax Rate (Adjusted ETR)
Adjusted Effective Tax Rate is used to show investors and management the rate
of tax applied to the Group's Adjusted Profit Before Tax. The measure is
calculated by dividing Adjusted Income Tax Expense by Adjusted Profit Before
Tax, expressed as a percentage.
Continuing operations 6 months to 30 June 2025 6 months to 30 June 2024
$m
$m
Income tax expense 52 65
Tax adjustments on:
Amortisation and impairment of intangible assets (excluding computer software) 25 27
Net interest adjustments (1) 2
One-off and adjusting items 28 12
Adjusted income tax expense (a) 104 106
Adjusted profit before tax (b) 418 459
Adjusted effective tax rate (a/b) 25.0% 23.1%
The Group's effective tax rate (ETR) for the period was 24.2% (June 2024:
22.0%). The Group's Adjusted ETR for continuing operations before amortisation
of intangible assets (excluding computer software), one-off items and the net
interest adjustments for the period was 25.0% (June 2024: 23.1%). This
compares with a blended rate of tax for the countries in which the Group
operates of 25.2% (June 2024: 25.3%).
The Group's tax charge and Adjusted ETR will be influenced by the global mix
and level of profits, changes in future tax rates and other tax legislation,
foreign exchange rates, the utilisation of brought-forward tax losses on which
no deferred tax asset has been recognised, the resolution of open issues with
various tax authorities, acquisitions and disposals.
Legal statements
The financial information for the six month period ended 30 June 2025
contained in this interim announcement has been approved by the Board on 30
July 2025 and authorised for release on 31 July 2025.
These condensed interim financial statements do not comprise statutory
accounts within the meaning of section 434 of the Companies Act 2006.
Statutory accounts for the year 31 December 2024 were approved by the Board of
Directors and authorised for release on 6 March 2025 and delivered to the
Registrar of Companies. The report of the auditors on those accounts was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of the
Companies Act 2006.
The directors of Rentokil Initial plc are listed in the Rentokil Initial plc
Annual Report for 31 December 2024. A list of the current directors is
maintained on the Rentokil Initial website: rentokil-initial.com.
Responsibility statement of the directors in respect of the 2025 interim
statement
We confirm that to the best of our knowledge:
● the condensed set of financial statements prepared in accordance with IAS 34,
'Interim Financial Reporting', as adopted in the UK (IAS 34), gives a true and
fair view of the assets, liabilities, financial position and profit or loss of
the Company and its subsidiaries included in the consolidation as a whole as
required by DTR 4.2.4R; and
● the interim management report includes a fair review of the information
required by DTR 4.2.7R of the Disclosure Guidance and Transparency Rules,
being an indication of important events that have occurred during the first
six months of the financial year and their impact on the condensed set of
financial statements; and a description of the principal risks and
uncertainties for the remaining six months of the year.
We have reviewed, and found that we have nothing to report in relation to the
requirements of DTR 4.2.8R of the Disclosure Guidance and Transparency Rules,
being related party transactions that have taken place in the first six months
of the current financial year and that have materially affected the financial
position or performance of the entity during that period; and any changes in
the related party transactions described in the last annual report that could
do so.
By Order of the Board
Andy Ransom
Chief Executive
31 July 2025
Independent review report to Rentokil Initial plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Rentokil Initial plc's condensed consolidated interim
financial statements (the "interim financial statements") in the 2025 Interim
Results of Rentokil Initial plc for the 6 month period ended 30 June 2025 (the
"period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Consolidated Balance Sheet as at 30 June 2025;
· the Consolidated Statement of Profit or Loss and Other Comprehensive
Income for the period then ended;
· the Consolidated Statement of Changes in Equity for the period then
ended;
· the Consolidated Cash Flow Statement for the period then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the 2025 Interim Results of
Rentokil Initial plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting' and the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the 2025 Interim Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The 2025 Interim Results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the 2025 Interim Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the 2025 Interim Results, including
the interim financial statements, the directors are responsible for assessing
the group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the 2025 Interim Results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
31 July 2025
Cautionary statement
In order to utilise the 'safe harbour' provisions of the U.S. Private
Securities Litigation Reform Act of 1995 (the "PSLRA") and the general
doctrine of cautionary statements, Rentokil Initial plc ("the Company") is
providing the following cautionary statement: This communication contains
forward-looking statements within the meaning of the PSLRA. Forward-looking
statements can sometimes, but not always, be identified by the use of forward-
looking terms such as "believes," "expects," "may," "will," "shall," "should,"
"would," "could," "potential," "seeks," "aims," "projects," "predicts," "is
optimistic," "intends," "plans," "estimates," "targets," "anticipates,"
"continues" or other comparable terms or negatives of these terms and include
statements regarding Rentokil Initial's intentions, beliefs or current
expectations concerning, amongst other things, the results of operations of
the Company and its consolidated entities ("Rentokil Initial" or "the Group"),
financial condition, liquidity, prospects, growth, strategies and the economic
and business circumstances occurring from time to time in the countries and
markets in which Rentokil Initial operates. Forward- looking statements are
based upon current plans, estimates and expectations that are subject to
risks, uncertainties and assumptions. Should one or more of these risks or
uncertainties materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or anticipated by such
forward-looking statements. The Company can give no assurance that such plans,
estimates or expectations will be achieved and therefore, actual results may
differ materially from any plans, estimates or expectations in such
forward-looking statements. Important factors that could cause actual results
to differ materially from such plans, estimates or expectations include: the
Group's ability to integrate acquisitions successfully, or any unexpected
costs or liabilities from the Group's disposals; difficulties in integrating,
streamlining and optimising the Group's IT systems, processes and
technologies, including artificial intelligence technologies; the Group's
ability to attract, retain and develop key personnel to lead the Group's
business; the availability of a suitably skilled and qualified labour force to
maintain the Group's business; cyber security breaches, attacks and other
similar incidents, as well as disruptions or failures in the Group's IT
systems or data security procedures and those of the Group's third-party
service providers; weakening general economic conditions, including changes in
the global job market or decreased consumer confidence or spending levels,
especially as they may affect demand from the Group's customers; inflationary
pressures, such as increases in wages, fuel prices and other operating costs;
the Group's ability to implement its business strategies successfully,
including achieving its growth objectives; the Group's ability to retain
existing customers and attract new customers; the highly competitive nature of
the Group's industries; extraordinary events that impact the Group's ability
to service customers without interruption, including a loss of its third-party
distributors; the impact of environmental, social and governance ("ESG")
matters, including those related to climate change and sustainability, on the
Group's business, reputation, results of operations, financial condition
and/or prospects; supply chain issues, which may result in product shortages
or other disruptions to the Group's business; the Group's ability to protect
its intellectual property and other proprietary rights that are material to
the Group's business; the Group's reliance on third parties, including
third-party vendors for business process outsourcing initiatives, investment
counterparties, and franchisees, and the risk of any termination or disruption
of such relationships or counterparty default or litigation; the Group's
ability to prevent or detect fraud by third-party service providers,
contractors, employees, franchisees or any other third parties or
counterparties; any future impairment charges, asset revaluations or
downgrades; failure to comply with the many laws and governmental regulations
to which the Group is subject or the implementation of any new or revised
laws or regulations that alter the environment in which the Group does
business, as well as the costs to the Group of complying with any such
changes and the risk of related litigation; termite damage claims and lawsuits
related thereto and any associated impacts on the termite provision; the
Group's ability to comply with safety, health and environmental policies, laws
and regulations, including laws pertaining to the use of pesticides; any
actual or perceived failure to comply with stringent, complex and evolving
laws, rules, regulations and standards in many jurisdictions, as well as
contractual obligations, including data privacy and security, and any
litigation (including class action claims and lawsuits) related to such actual
or perceived failures; the identification of material weaknesses in the
Group's internal control over financial reporting within the meaning of
Section 404 of the Sarbanes-Oxley Act; changes in tax laws and any
unanticipated tax liabilities; adverse credit and financial market events and
conditions, which could, among other things, impede access to or increase the
cost of financing; the restrictions and limitations within the agreements and
instruments governing the Group's indebtedness; a lowering or withdrawal of
the ratings, outlook or watch assigned to the Group's debt securities by
rating agencies; an increase in interest rates and the resulting increase in
the cost of servicing the Group's debt; and exchange rate fluctuations and the
impact on the Group's results or the foreign currency value of the Company's
ADSs and any dividends. The list of factors presented here is representative
and should not be considered to be a complete statement of all potential risks
and uncertainties. Unlisted factors may present significant additional
obstacles to the realisation of forward-looking statements. The Company
cautions you not to place undue reliance on any of these forward-looking
statements as they are not guarantees of future performance or outcomes and
that actual performance and outcomes, including, without limitation, the
Group's actual results of operations, financial condition and liquidity, and
the development of new markets or market segments in which the Group operates,
may differ materially from those made in or suggested by the forward-looking
statements contained in this communication. Except as required by law,
Rentokil Initial assumes no obligation to update or revise the information
contained herein, which speaks only as of the date hereof.
The Company makes no guarantee that trends in the management of termite damage
claims will continue. Additionally, the Company makes no guarantee that its
operational improvement plans will mitigate against or reduce the number of
termite damage claims (litigated and non-litigated) against the Company nor
that these plans will reduce the ongoing cost to resolve such claims.
Additional information concerning these and other factors can be found in
Rentokil Initial's filings with the U.S. Securities and Exchange Commission
("SEC"), which may be obtained free of charge at the SEC's website, http://
www.sec.gov, and Rentokil Initial's Annual Reports, which may be obtained free
of charge from the Rentokil Initial website, https://www.rentokil-initial.com
No statement in this communication is intended to be a profit forecast and no
statement in this communication should be interpreted to mean that earnings
per share of Rentokil Initial for the current or future financial years would
necessarily match or exceed the historical published earnings per share of
Rentokil Initial.
This communication presents certain non-IFRS measures, which should not be
viewed in isolation as alternatives to the equivalent IFRS measure; rather
they should be viewed as complements to, and read in conjunction with, the
equivalent IFRS measure. Non-IFRS measures presented also include Organic
Revenue Growth, One-off and adjusting items, Adjusted Interest, Adjusted
Operating Profit, Adjusted Profit Before and After Tax, Adjusted EBITDA,
Adjusted Earnings Per Share, Free Cash Flow, Adjusted Free Cash Flow, Adjusted
Free Cash Flow Conversion and Adjusted Effective Tax Rate. Definitions for
these measures can be found under the Use of Non-IFRS measures section of the
financial statements. The Group's internal strategic planning process is also
based on these measures, and they are used for incentive purposes. These
measures may not be calculated in the same way as similarly named measures
reported by other companies.
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