Rentokil shares climb on in-line results, North America meets expectations

Published 28/01/2025, 10:32

Investing.com -- Shares of Rentokil (LON:RTO) Initial jumped by over 4% on Tuesday following the release of its FY 2024 results, which were in line with market expectations. 

The UK-based company reported solid results for the full year ending December 31, 2024, with group and North America results meeting prior guidance. 

For Q4 2024, Rentokil reported a 3% growth in group organic revenue, with North America leading the charge at 2.3%. 

This growth was driven in part by a 1.5% increase in North America’s Pest Control Services, supported by marketing initiatives that boosted inbound lead flow. 

The company's overall financial performance in terms of adjusted operating margin and adjusted PBTA also met expectations, reflecting a steady path forward.

Rentokil's North American integration efforts are progressing well. Q4 saw successful pilot projects, including new satellite branches, revised technician and sales compensation, and rebranding. 

Additionally, Rentokil announced that Brad Paulsen, chief executive officer of North America, will step down in April 2025 to pursue a new opportunity in the building materials sector. 

This departure coincides with the company's ongoing North American integration efforts. Alain Moffroid, the company's chief commercial officer, will assume the role of interim chief exectuive of North America. 

“We forecast FY25 PBTA that RTO is moving to USD reporting going forward. The rhetoric around the TMX integration will likely be the main focus of th the integration review on future timings, branch sizes and synergies,” said analysts at RBC Capital Markets in a note.

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