Rentokil Initial 1H results: building the platform: Slightly softer near-term trading. New plan to self-fund growth investments in North America. FY26/27/28e PBT estimates 0%/-3%/0%, though FCF lower

研报英文原文证据摘录

Rentokil Initial 1H results: building the platform: Slightly softer near-term trading. New plan to self-fund growth investments in North America. FY26/27/28e PBT estimates 0%/-3%/0%, though FCF lower

Barclays | Rentokil Initial

International had a stronger 2Q with 4.2% organic (in-line), though margins were c50bps

behind our estimates due to the Pacific region.

Management reorganisation. The new North America CEO joins on 3rd August, the business

has a new Chief Marketing Officer for North American, a head office is being established in

Dallas, and a new role of Chief Transformation Officer (to optimise the cost base) is being

created. Leadership and the operating models of US Residential and Commercial are also being

separated (a model pursued by Rollins).

FCF of $248m (post-exceptionals) is 73% of Adj NI (vs 75% 1H25). One-off and adjusting

items are $112m, similar to last year, comprised of termite provisions for North America and

International transformation costs and other items. This was a $70m drag on FCF in the half

($48m 1H25). Guidance for one-off costs has risen to $110-120m (from $80-85m) including

higher planned transformation costs in International. Capex, leases, interest, tax and working

capital cash outflows were all similar to the prior year.

Termite claims provisions increase +$8m vs FY25 at $392m, after a $47m additional provision

triggered by higher claims costs post a settlement of a small number of larger commercial

cases. Cash utilisation of provisions guidance (which is mostly Termite) has risen to $115-125m

(from $85-95m).

Refined strategy - The CEO outlines goals of: i) re-focusing the organisation on lifetime

customer experience; ii) to drive both sales and retention and operational excellence through