Pest control firm Rentokil Initial Plc. (RTOKY.PK,RTO.L) Friday reported a profit for the year, compared to a loss last year, with revenue improvement in all divisions, despite market challenges. The firm hiked the final dividend by 7.5 percent. The stock is surging close to 11 percent on the London Stock Exchange.
For the year, profit attributable to equity holders of the company was 51.4 million pounds compared to a loss of 69.7 million pounds last year. Earnings per share was 2.82 pence, compared to loss per share of 3.84 pence last year.
Pre-tax profit was 82.7 million pounds in comparison with a loss of 50.5 million pounds in 2011. Adjusted profit before tax climbed 10.1 percent for 2012.
Annual revenues edged up to 2.546 billion pounds from 2.544 billion pounds in the prior year.
In Textiles & Hygiene, revenue grew 2.5 percent to 905.1 million pounds after adjusting for the acquisition of a textiles supply chain business in the fourth quarter of 2011 and the disposals of Austrian flat linen and Australian towel rolls cleaning businesses in the first half of 2012.
According to the company, the division's performance was impacted by an increasingly difficult macro-economic environment in Northern Europe.
Pest Control revenues advanced 2.8 percent to 773.4 million pounds, helped by several bolt-on acquisitions.
City Link revenue increased 4.8 percent to 321.7 million pounds, driven primarily from growth in online shopping in 2012.
On a continuing operation basis, fourth-quarter pre-tax loss narrowed to 0.2 million pounds from 116.2 million pounds. Adjusted profit before tax increased 15.9 percent for the period. Quarterly revenue edged up 0.7 percent to 663.2 million pounds.
The company proposed that the final dividend be raised 7.5 percent to 1.43 pence from last year's 1.33 pence, taking the full year total to 2.10 pence.
The group achieved cost savings of 59 million pounds in 2012, higher than its target of 50 million pounds, through a combination of restructuring, procurement, service productivity and back office rationalisation.
Alan Brown, CEO, said, "Rentokil Initial finished the year strongly, with adjusted profit before tax up 15.9% in Q4 and 10.1% for 2012 as a whole at constant exchange rates...Furthermore, we increased organic revenue growth by 1.3% from negative 0.5% to positive 0.8% (excluding Initial Facilities Spain) despite difficult market conditions for our largest businesses.''
Looking ahead, the company is confident that 2013 will see it sustain the momentum achieved in the final quarter of 2012. The company expects both organic revenue growth in 2013 and further growth through bolt-on acquisitions.
Separately, the firm said William Rucker stood down as a non-executive director on March 14, following a review of his commitments which include the chairmanship of recently re-listed Crest Nicholson PLC. RTO.L is currently gaining 10.7 percent at 100.19 pence.
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