'Oh dear!'
Ha! It's Rentokil's problem, Voice, not ours. We ain't got headaches. Not today, anyway.
'Those ghosts though. It's not an easy life, boss, hiring yourself out like that. Of course they're going to have headaches.'
Eh? What are you going on about?!
'I'm talking about Rentaghost.'
Yes, yes. Another classic from my childhood, but we're talking about Rentokil.
'Oh, okay.'
Idiot!
'Ha!'
Anyway ...
From Wealth Club -
Rentokil, the pest control specialist, has announced its full year results:
Organic revenue grew by 4.9% while adjusted operating profit increased by 57% benefiting from the Terminix acquisition.
Operating margin was up 1.20 percentage points to 16.6%. The group targets margins of greater than 19.0% by FY26, a year later than previously expected.
Terminix cost synergy guidance raised but organic growth in North America pest control is below expectations and timeline for the integration has been extended.
Right. What does Charlie say?
Charlie Huggins, Manager of the Quality Shares Portfolio at Wealth Club, comments:
"Transformational acquisitions always bring significant risk to a business. Rentokil's acquisition of Terminix is a case in point.
"The Terminix deal is by far the largest the group has ever done, establishing it as the leading Pest Control business in North America and opening up substantial cost savings. However, there have clearly been teething issues with the integration.
"The North American pest control business is seeing lower organic growth than expected due mainly to weak new customer acquisition. The distraction and complexity of such a large integration has meant the group has taken its eye off the ball. This has been compounded by an increasingly competitive market environment.
"Although the cost synergy targets for the Terminix acquisition have been increased, the timeline for the integration has been pushed back a year. In addition, Rentokil will have to reinvest some of those savings in sales and marketing to restore growth in North America pest control.
"Overall, today's results are unlikely to reassure investors. Until growth in North America pest control improves, the Terminix acquisition will be treated with a large degree of scepticism."
Thanks, Charlie.
ENDS
'Nothing to add, boss?'
All I can say is ... Goggins is well out of it with that raccoon and everything. Do you know what I mean?
'Yeah.'
ENDS
ENDS
ENDS
