Currencies

Nomura rounds up markets’ biggest misses in 2016

Forecasting markets a year in advance is never easy, but with “year-ahead investment themes” season well underway, Nomura has provided a handy reminder of quite how difficult it is, with an overview of markets’ biggest hits and misses (OK, mostly misses) from the start of 2016. The biggest miss among analysts, according to Nomura’s Sam […]

Continue Reading

Property

Spanish construction rebuilds after market collapse

Property developer Olivier Crambade founded Therus Invest in Madrid in 2004 to build offices and retail space. For five years business went quite well, and Therus developed and sold more than €300m of properties. Then Spain’s economy imploded, taking property with it, and Mr Crambade spent six years tending to Dhamma Energy, a solar energy […]

Continue Reading

Currencies

Euro suffers worst month against the pound since financial crisis

Political risks are still all the rage in the currency markets. The euro has suffered its worst slump against the pound since 2009 in November, as investors hone in on a series of looming battles between eurosceptic populists and establishment parties at the ballot box. The single currency has shed 4.5 per cent against sterling […]

Continue Reading

Banks

RBS falls 2% after failing BoE stress test

Royal Bank of Scotland shares have slipped 2 per cent in early trading this morning, after the state-controlled lender emerged as the biggest loser in the Bank of England’s latest round of annual stress tests. The lender has now given regulators a plan to bulk up its capital levels by cutting costs and selling assets, […]

Continue Reading

Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading

Categorized | Equities

Rentokil shares rise on stronger profits


Posted on February 27, 2015

Rentokil pest technician Glyn Hughes removes equipment from his van©Bloomberg

Rentokil Initial shares rose to a four-and-a-half-year high on Friday as strong demand for its pest control services combined with cost measures to drive pre-tax profit up 58.4 per cent.

The company unveiled a series of innovative products, including a trap for small vertebrates that sends a text when it catches a creature and an infrared-activated poison dispenser as it seeks to stimulate further growth in its mature markets, where competition is intense.

    Shares in Rentokil jumped 4.4 per cent to 135.3p in London.

    “I feel like we’ve had a pretty good year all in all,” said Andy Ransom, chief executive.

    The company is looking to expand in emerging markets where warm, humid weather is conducive to rapid rodent breeding and termite outbreaks.

    The sector has been boosted by strong growth in global bedbug outbreaks, as a result of warmer weather and rising global travel.

    The FTSE 250 company is targeting Latin America, where revenue jumped 308 per cent, and Asia, with revenue up 29.1 per cent in India, China and Vietnam combined. Mr Ransom said these regions have large pest populations but limited extermination services, providing ample growth potential.

    The company accelerated its merger and acquisition programme, in which it acquired 30 businesses with combined revenues of £66m in 2014, including purchases in Chile, Colombia, India, Mozambique, Korea, Brazil, Brunei, and Singapore.

    Revenue climbed 2.7 per cent to £1.74bn and the company slashed net debt to £260m, a 15-year low, as its costly restructuring continues at a more muted pace.

    In North America, Rentokil increased sales by 6.6 per cent and hopes to fatten sales further through the launch of its “CageConnect” product, a trap for small vertebrates such as skunks, squirrels and raccoons that alerts the operator by SMS when triggered.

    The hygiene division performed less well, with operating profit down 11 per cent to £93.9m.

    Trade in Europe proved challenging, with operating profit down 8.7 per cent, although Mr Ransom said poor growth in the eurozone was not to blame, and the infrared mouse traps should help growth recover when launched.

    ”Rats don’t read the Financial Times . . . If you’ve ever had a rat running around your kitchen you don’t say, ‘let’s wait until the economy picks up’. It’s a very defensive industry, a very reactive industry,” he said.

    Robert Plant, analyst at Morgan Stanley, highlighted that beneath the acquisitions, organic growth was “fairly low compared to other parts of the sector” at 1.2 per cent in 2014.

    “Long term we remain concerned that the core businesses operate in mature markets whose margins may be eroded by greater competition,” he said.