Rentokil Initial (RTO) H1 2024 earnings summary

Executive summary

• Revenue rose 4.0% to £2.8bn in H1 2024, with 2.8% organic growth and all regions contributing positively.

• Adjusted operating profit increased 4.7% to £455m; group margin up 10bps to 16.5%.

• North America integration progressing well, with $58m gross cost synergies delivered in H1 and $105m net cost synergies to date.

• Interim dividend of 3.16p declared, up 14.9% year-on-year.

• 23 bolt-on acquisitions in H1, adding annualised revenues of £81m.

Financial highlights

• Revenue: £2.8bn (+4% YoY); organic growth 2.8%.

• Adjusted operating profit: £455m (+4.7% YoY); margin 16.5% (+10bps).

• Statutory profit before tax: £253m (+5.6% YoY); EPS up to 7.78p.

• Free cash flow: £172m; cash conversion 62.2%.

• Net debt/EBITDA: 2.8x, with liquidity headroom of £1,493m.

Outlook and guidance

• Full-year cash conversion expected to return to 80–90%.

• Adjusted effective tax rate guided at 24–25%.

• M&A spend for 2024 revised to £200–250m; capex guidance £250–260m.

• FX headwind of £30–40m anticipated, offset by operational progress.

• Presentation currency to switch to USD from 2025.