Rentokil Initial Q3 Pre-Tax Profit More Than Doubles

11/6/2009 6:28 AM ET

(RTTNews) - Pest control and cleaning company Rentokil Initial Plc (RTO.L: News ) reported third-quarter pre-tax profit that more than doubled, boosted by the turnaround programme in the UK Pest Control business. Additionally, the company said its fourth-quarter outlook remains positive.

Third-quarter pre-tax profit from continuing operations surged 177.8%, at actual exchange rates or AER, to GBP 30.0 million from GBP 10.8 million in the prior-year period. Adjusted pre-tax profit from continuing operations, at AER, jumped 114.7% to GBP 49.6 million from GBP 23.1 million in the year-ago period.

Pre-tax profit from pro forma continuing operations, at 2008 constant exchange rates or CER, for the quarter more than doubled to GBP 24.0 million from GBP 11.1 million in the previous year. Adjusted pre-tax profit from pro forma continuing operations for the quarter was GBP 42.3 million, higher than GBP 23.3 million last year, at 2008 CER.

At AER, revenue from continuing operations for the quarter was GBP 622.6 million, up 3.6% from GBP 600.8 million in the comparable period. Revenue from pro forma continuing operations at 2008 CER decreased 3.2% to GBP 583.0 million from GBP 602.2 million a year ago.

Alan Brown, chief executive officer of Rentokil Initial plc, said, "Our operational agenda has been in full flow during Q3 and continues to deliver to expectation on service, capability, cost and especially cash."

Looking into the company's divisional performance, Textiles and Washroom Services' third-quarter revenue at 2008 CER increased 2.9% to GBP 192.9 million, primarily due to strong performance from France and the benefit of the Raywerk acquisition in Austria, made at the end of last year.

At 2008 CER, Facilities Services division posted revenues of GBP 146.1 million, down 9.3% from GBP 161.1 million in the 2008 period, due to a number of contract terminations, primarily in the retail sector.

City Link's revenues for the quarter dropped 9% to GBP 85.1 million, while revenue for the Pest Control division grew 4.4% to GBP 105.7 million, at 2008 CER.

Meanwhile, third-quarter revenue in Asia Pacific at 2008 CER slipped 12.1% year-on-year, partly as a result of the disposal of the water business in Malaysia and the exit of a low-margin Hong Kong government contract.

Year-to-date, pre-tax profit from continuing operations, at AER, was up 31.3% to GBP 38.2 million from GBP 29.1 million, while pre-tax profit from pro forma continuing operations, at 2008 CER, slid 21.3% to GBP 24.7 million from GBP 31.4 million a year earlier.