UPDATE 1-Rentokil lifts outlook as profit beats on Terminix deal, pest control demand
(Adds outlook, background on Terminix deal)
March 16 (Reuters) -
Rentokil Initial Plc lifted its medium-term outlook on Thursday after posting a better-than-expected annual profit, helped by the strong demand for pest control services in the United States and the acquisition of Terminix.
The British pest control services provider raised its organic revenue growth forecast in the medium term to about 4- 5% and lifted its annual pre-tax cost savings projections from the Terminix deal to about $200 million from $150 million by 2025.
Rentokil said its annual profits were buoyed by the strong demand for pest control services from the dominant North American business after the $6.7 billion purchase of Terminix last year.
Although the threat of an approaching recession looms, ridding homes of pests is not seen as a discretionary but an essential service, said analysts.
The company posted adjusted pretax profit of 515 million pounds ($642.1 million) at constant exchange rates for the year ended Dec. 31, compared with analysts' average estimate of 473.4 million pounds.
It had posted adjusted pretax profit of 416 million pounds last year. (Reporting by Shreyaa Narayanan in Bengaluru; Editing by Rashmi Aich and Dhanya Ann Thoppil)
