UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 6-K
__________________
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of September 2024
Commission File Number: 001-41524
___________________________________
Rentokil Initial plc
(Registrant’s name)
___________________________________
Compass House
Manor Royal
Crawley
West Sussex RH10 9PY
United Kingdom
(Address of principal executive office)
_____________________________________
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form
40-F ☐
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(1): ☐
Indicate by check mark if the registrant is
submitting the Form 6-K in paper as permitted by Regulation S-T
Rule 101(b)(7): ☐
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Trading
Update dated 11 September 2024
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
11 September 2024
Trading Update
Rentokil Initial plc ("the Group") provides the following update on
current trading and the outlook for FY 24.
●
North
America Organic Revenue growth now anticipated to be c.1% in H2
24
●
North
America operating profit also being impacted by higher sales,
service and other costs
●
FY
24 North America Adjusted Operating Profit margin* now anticipated
to be c.17.2% and Group Adjusted Operating Profit margin* to be
c.15.5%
●
Rest
of Group continues to perform well
●
At
current exchange rates, additional FY 24 currency headwind of
c.£10m
●
FY
24 Group Adjusted PBTA now expected to be c.£700m
*Presented at constant exchange rates
North America organic growth
While we saw some positive momentum in North America sales activity
at the end of the second quarter, the trading performance in July
and August was lower than anticipated. There has also been some
modest disruption to organic growth from branch integration. We now
expect H2 24 Organic Revenue growth in North America of
c.1%.
The estimated drop through impact of the revised North America
growth expectation on FY 24 Adjusted Operating Profit is
c.£20m.
North America operations
To position Rentokil to deliver our planned growth through the peak
season, both sales and service resource was expanded. As a result
of lower than expected lead flow and sales growth, the operation
was over-resourced in both sales and service. Increased weekend
working to drive additional revenue also resulted in an increase in
overtime expenditure. In addition, spend on materials and
consumables is higher than expected.
The aggregate impact of these cost items on FY 24 Group Adjusted
Operating Profit is anticipated to be c.£50m.
Foreign currency
Since the Interim Results, Sterling has strengthened against the US
Dollar, and hyper-inflation has eased in a number of markets. If
rates remain at current levels to year end, this will result in an
additional headwind of c.£10m to FY 24 Adjusted
PBTA.
Right Way 2 Plan
Our immediate focus is on the Right Way 2 plan to improve revenue
growth, through increased lead flow, sales conversion and customer
retention. We are taking decisive action to mitigate the cost
over-runs as we exit the peak season, managing inventory more
effectively, managing technician workload and overtime, and will
right-size labour resources for the volume
opportunity.
We continue to believe in the fundamental strength of the North
America business. The substantial structural growth opportunities,
enhanced by the benefits of the Terminix transaction, means the
value creation opportunity remains intact, albeit taking longer to
realise than anticipated.
Conference Call details
Today, 11 September at 8:00 am BST, Rentokil Initial Chief
Executive, Andy Ransom and Chief Financial Officer, Stuart
Ingall-Tombs will host a 30‐minute conference call for
analysts and investors. There will be an additional conference call
for US audiences at 1:00 pm BST. A replay will be made available on
the Company website.
For the 8:00 am call
To join via teleconference use conference ID 82879 with one of the
dial-in options below. An audio webcast will be accessible at
https://events.q4inc.com/attendee/377474167.
For the 1:00 pm call
To join via teleconference use conference ID 43099 with one of the
dial-in options below. An audio webcast will be accessible at
https://events.q4inc.com/attendee/749955350.
UK: +44 20 3481 4247
France: +33 1 73 02 31 36
Germany: +49 69 589964217
Sweden: +46 8 505 246 90
Singapore: +65 3159 1234
USA: +1 (646) 307 1963
Additional international access conference numbers can be found at
https://registrations.events/directory/international/itfs.html
Rentokil Initial will announce third quarter results for the period
ended 30 September 2024 on 17 October 2024.
The person responsible for making this announcement is Rachel
Canham, Group General Counsel
and Company Secretary, Rentokil Initial plc.
Enquiries: Investors / Analysts: Peter Russell, Rentokil Initial
plc, + 44 7795 166506
Media: Malcolm Padley, Rentokil Initial plc, +44 7788
978199
Cautionary statement
In order, among other things, to utilise the 'safe harbour'
provisions of the U.S. Private Securities Litigation
Reform Act of 1995 (the "PSLRA") and the general doctrine of
cautionary statements, Rentokil Initial plc ("the Company") is
providing the following cautionary statement: This communication
contains forward-looking statements within the meaning of the
PSLRA. Forward-looking statements can sometimes, but not always, be
identified by the use of forward-looking terms such as "believes,"
"expects," "may," "will," "shall," "should," "would," "could,"
"potential," "seeks," "aims," "projects," "predicts," "is
optimistic," "intends," "plans," "estimates," "targets,"
"anticipates," "continues" or other comparable terms or negatives
of these terms and include statements regarding Rentokil Initial's
intentions, beliefs or current expectations concerning, amongst
other things, the results of operations of the Company and its
consolidated entities ("Rentokil Initial" or "the Group), financial
condition, liquidity, prospects, growth, strategies and the
economic and business circumstances occurring from time to time in
the countries and markets in which Rentokil Initial operates.
Forward-looking statements are based upon current plans, estimates
and expectations that are subject to risks, uncertainties and
assumptions. Should one or more of these risks or uncertainties
materialise, or should underlying assumptions prove incorrect,
actual results may vary materially from those indicated or
anticipated by such forward-looking statements. The Company can
give no assurance that such plans, estimates or expectations will
be achieved and therefore, actual results may differ materially
from any plans, estimates or expectations in such forward-looking
statements. Important factors that could cause actual results to
differ materially from such plans, estimates or expectations
include: the Group's ability to integrate acquisitions
successfully, or any unexpected costs or liabilities from the
Group's disposals; difficulties in integrating, streamlining and
optimising the Group's IT systems, processes and technologies; the
Group's ability to attract, retain and develop key personnel to
lead the Group's business; the availability of a suitably skilled
and qualified labour force to maintain the Group's business; cyber
security breaches, attacks and other similar incidents, as well as
disruptions or failures in the Group's IT systems or data security
procedures and those of its third-party service providers;
inflationary pressures, such as increases in wages, fuel prices and
other operating costs; weakening general economic conditions,
including changes in the global job market, or decreased consumer
confidence or spending levels especially as they may affect demand
from the Group's customers; the Group's ability to implement its
business strategies successfully, including achieving its growth
objectives; the Group's ability to retain existing customers and
attract new customers; the highly competitive nature of the Group's
industries; extraordinary events that impact the Group's ability to
service customers without interruption, including a loss of its
third-party distributors; the impact of environmental, social and
governance ("ESG") matters, including those related to climate
change and sustainability, on the Group's business, reputation,
results of operations, financial condition and/or prospects; supply
chain issues, which may result in product shortages or other
disruptions to the Group's business; the Group's ability to protect
its intellectual property and other proprietary rights that are
material to the Group's business; the Group's reliance on third
parties, including third-party vendors for business process
outsourcing initiatives, investment counterparties, and
franchisees, and the risk of any termination or disruption of such
relationships or counterparty default or litigation; any future
impairment charges, asset revaluations or downgrades; failure to
comply with the many laws and governmental regulations to which the
Group is subject or the implementation of any new or revised laws
or regulations that alter the environment in which the Group does
business, as well as the costs to the Group of complying with any
such changes; termite damage claims and lawsuits related thereto
and associated impacts on the termite provision; the Group's
ability to comply with safety, health and environmental policies,
laws and regulations, including laws pertaining to the use of
pesticides; any actual or perceived failure to comply with
stringent, complex and evolving laws, rules, regulations and
standards in many jurisdictions, as well as contractual
obligations, including data privacy and security; the
identification of a material weakness in the Group's internal
control over financial reporting within the meaning of Section 404
of the Sarbanes-Oxley Act; changes in tax laws and any
unanticipated tax liabilities; adverse credit and financial market
events and conditions, which could, among other things, impede
access to or increase the cost of financing; the restrictions and
limitations within the agreements and instruments governing our
indebtedness; a lowering or withdrawal of the ratings, outlook or
watch assigned to the Group's debt securities by rating agencies;
an increase in interest rates and the resulting increase in the
cost of servicing the Group's debt; and exchange rate fluctuations
and the impact on the Group's results or the foreign currency value
of the Company's ADSs and any dividends. The list of factors
presented here is representative and should not be considered to be
a complete statement of all potential risks and uncertainties.
Unlisted factors may present significant additional obstacles to
the realisation of forward-looking statements. The Company cautions
you not to place undue reliance on any of these forward-looking
statements as they are not guarantees of future performance or
outcomes and that actual performance and outcomes, including,
without limitation, the Group's actual results of operations,
financial condition and liquidity, and the development of new
markets or market segments in which the Group operates, may differ
materially from those made in or suggested by the forward-looking
statements contained in this communication. Except as required by
law, Rentokil Initial assumes no obligation to update or revise the
information contained herein, which speaks only as of the date
hereof.
The Company makes no guarantee that trends in the management of
termite damage claims will continue. Additionally, the Company
makes no guarantee that its operational improvement plans will
mitigate against or reduce the number of termite damage claims
(litigated and non-litigated) against the Company nor that these
plans will reduce the ongoing cost to resolve such
claims.
Additional information concerning these and other factors can be
found in Rentokil Initial's filings with
the U.S. Securities and Exchange Commission ("SEC"),
which may be obtained free of charge at the SEC's website, http://
www.sec.gov, and Rentokil Initial's Annual Reports, which may be
obtained free of charge from the Rentokil Initial website,
https://www.rentokil-initial.com
No statement in this announcement is intended to be a profit
forecast and no statement in this announcement should be
interpreted to mean that earnings per share of Rentokil Initial for
the current or future financial years would necessarily match or
exceed the historical published earnings per share of Rentokil
Initial.
This communication presents certain non-IFRS measures, which should
not be viewed in isolation as alternatives to the equivalent IFRS
measure, rather they should be viewed as complements to, and read
in conjunction with, the equivalent IFRS measure. These include
revenue and measures presented at actual exchange rates ("AER" -
IFRS) and constant full year 2023 exchange rates ("CER" -
Non-IFRS). Non-IFRS measures presented also include Organic Revenue
Growth, One-off and adjusting items, Adjusted Operating Profit and
Adjusted PBTA. Definitions for these measures can be found in note
14 of the financial statements in the Interim Results. The Group's
internal strategic planning process is also based on these
measures, and they are used for incentive purposes. These measures
may not be calculated in the same way as similarly named measures
reported by other companies.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Date:
11 September 2024
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RENTOKIL INITIAL PLC
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/s/
Rachel Canham
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Name:
Rachel Canham
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Title:
Group General Counsel and Company Secretary
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