Rentokil’s North America chief sells down

The impact of Covid-19 was felt most keenly in the ‘protect and enhance’ segment that provides property and workwear services. With exposure to the ‘hotels, restaurants and catering’ (Horeca) sector, shuttered businesses saw the division’s ‘ongoing’ revenue drop by 27 per cent in the second quarter, to £69m.

But pest control – which account for the bulk of earnings – has been more resilient, aided by the fact that for commercial customers, these are essential services underpinned by regulatory requirements. While second-quarter sales dropped by 6 per cent, because around 80 per cent of revenue is contracted, shortfalls can often be recovered later. Rentokil has also benefited from its digital offering which allows for remote pest monitoring – who needs a basic bait box when you can have a ‘smart’ mouse trap?

The hygiene business has shone during the pandemic – first-half soap and hand sanitiser sales were twice the total for the whole of 2019. Having mobilised a new range of disinfection services within three weeks, this pulled in £49m of revenue. But beyond this short-term boon, there is likely to be greater global focus on hygiene standards moving forward, which should provide momentum as Rentokil expands into 20 new countries.

The group says it has moved out of the ‘crisis management’ phase into full recovery mode. M&A activity has been resumed and it plans to spend at least £100m on acquisitions in the second half of the year.