Rentokil Initial Plc Rises 9% On Strong Performance

The share price of Rentokil Initial (LSE: RTO) — the multi-national facilities management and support services group — is currently up almost 9%, following release of its half-year report to 30 June 2013.

Adjusted operating profit rose 5.2%, to £ 112.6m, on revenue that was up 3.7%, at £1,166.3m (both on a constant exchange rate basis).  Adjusted earnings-per-share increased by 1.7%. to 3.59p, and the company will declare an interim dividend of 0.7p per share, an increase of 4.5% on last year’s.

The company also reported a strong acceleration of profit growth in the second quarter. However, underlying organic revenue growth was down 1.6% year-on-year, blamed in part on poor weather in the US. It also said that its markets in continental Europe “continue to be challenging”.

Commenting on the results,  CEO Alan Brown said:

The business has performed strongly during Q2 despite adverse weather in Central and Eastern US and economic pressures in France and the Netherlands in particular.  The introduction of our Integrated Country Operating Model is delivering cost and implementation benefits. The integration of Western Exterminator is proceeding to plan. Our major innovations in Hygiene and Workwear are being rolled out during Q3.

 “While we remain mindful of continuing challenging market conditions in Europe, we expect the momentum achieved in Q2 to be maintained in the second half.

Earlier this month Rentokil announced that Alan Brown is stepping down as CEO. His successor will be Andy Ransom, currently Regional Managing Director of the West Region (which covers the Americas, Middle East, Africa and parts of Europe).

At the time of writing Rentokill ‘s share price is 105.5p.  That’s up 10.5% so far this year, and 33% on this time last year.

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> Jon doesn’t own shares in Rentokil.