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Rentokil Initial: A fable for our times

No Free Lunch

Rentokil Initial: A fable for our times

Every year, Management Today and Leeds Business School ask Britain's largest public companies to evaluate their peers. In 2016, Rentokil Initial (RTO) was the fastest riser, leapfrogging 133 places to become the 25th most admired British company. This reflects a sea change at Rentokil. It was once ranked top, but that was more than 20 years ago. Then it was said to have "a clear strategy, a strong brand and an unerring ability to meet highly ambitious targets". Famously, the most ambitious target was to increase earnings per share (EPS) by 20 per cent a year. Sir Clive Thompson, Rentokil's chief executive, was asked whether this risked becoming a millstone. "I think I would sleep better if I didn't have it," he replied. "But I don't necessarily think it is in the interests of my shareholders that I sleep better." They came to wish that he had.

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