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Investing.com -- Rentokil Initial (LON:RTO) shares jumped over 9% on Thursday after the company reported a first-half profit slightly ahead of expectations and stronger sequential growth in its U.S. pest control business.
Adjusted profit before tax, including discontinued operations, was $444 million, 1% above the consensus estimate of $439 million. Adjusted earnings per share came in at 13.42 cents, exceeding the expected 12.9 cents.
Total (EPA:TTEF) revenue for the period reached $3.53 billion, up 3.1% year over year and in line with the consensus forecast of $3.50 billion, according to a report from Jefferies dated July 31, 2025.
Group organic revenue growth was 1.6%, falling short of the 2.2% expected by analysts. Organic growth in the pest control division was 1.8%, compared with a 2% consensus.
Within that, the U.S. business delivered 1.6% growth in the second quarter, improving from 0.5% in the first quarter. Pest control revenue outside the U.S. rose 3.8% on an organic basis.
Performance in the Hygiene segment remained weak, with first-half organic growth slowing to 0.9%, below expectations of 2.4% and a decline from 1.6% in the previous quarter.
Adjusted EBITA totaled $511 million, or $538 million including discontinued operations, in line with the consensus of $533 million.
The group’s EBITA margin stood at 15.2%, slightly under the expected 15.3% and down 120 basis points from a year earlier.
Pest control margins reached 18%, ahead of the 17.7% forecast, while North America posted a 16.9% margin versus 16.5% expected. Hygiene margins declined to 17.2%, missing the 17.8% estimate.
Rentokil said sales and marketing efforts in North America are beginning to show results, with resin and termite lead flow increasing 6.6% in June.
The company confirmed 100 satellite branches are now operational. Branch integration will resume in the second half, mainly at commercial locations.
The company maintained its $100 million cost-saving target and goal for North American operating margins to exceed 20% after 2026. However, the updated timeline indicates not all branches will be fully integrated by then.
Management said current trading is in line with expectations and left the full-year outlook unchanged.
Analyst consensus for 2025 forecasts $7.26 billion in revenue, 2.5% organic growth, $1.12 billion in EBITA with a 15.4% margin, and $922 million in adjusted profit before tax.