RTO Earnings Prediction
The chart below shows how RTO performed 10 days before and after its earnings report, based on data from the past quarters. Typically, RTO sees a +15.58% change in stock price 10 days leading up to the earnings, and a +1.32% change 10 days following the report. On the earnings day itself, the stock moves by -9.94%. This data can give you a slight idea of what to expect for the next quarter's release.
RTO Key Earning Data
2024/Q4
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RTO Earnings Analysis
Rentokil Initial plc Corporation (RTO.N) Earnings Conference Call
Positive
Revenue increased by 4% to GBP 2.8 billion with top-line growth in all regions, organic growth at 2.8%
Group adjusted operating profit grew by 4.7% to GBP 455 million, with a group margin of 16.5%
Statutory profit before tax increased by 5.6% to GBP 253 million
Group delivered gross cost synergies of $162 million and completed Phase 2 of integration program
Completion of Phase 2 of integration program, with first branch integrations underway, with revenues of around $37 million combined revenue
Delivery of 23 bolt-on deals in the first half, with estimated annualized revenues of GBP 81 million
North America Pest Control business saw organic growth of 1% in Q1, increasing to 1.5% in Q2
Successful execution of RIGHT WAY 2 growth plan, resulting in progress in colleague retention, brand awareness, inbound leads, and technician sales leads
Launched Terminix It brand campaign seen 685 million times, generating a 29% increase in branded search
Increased participation rate of sales leads from technicians from 50% in January to over 60% in June
Additional $25 million investment committed to growth initiatives in North America
Completed Phase 2 of the integration plan with the beginning of first branch integrations
Excellent progress on colleague retention, with global retention rate increased by 4.2% to almost 86%
Revenue growth of 9.6% in Hygiene & Wellbeing, with profit growth of 14.3%
Marie prior to purchase of GBP 45 million in Hygiene & Wellbeing acquisitions, exceeding full medium-term guidance
Gross cost synergies delivered in the region in H1 amounted to $22 million
Encouraging progress in key areas of RIGHT WAY 2 framework in North America, including colleague retention, customer retention initiatives, lead generation, and pricing discipline
Terminix It brand campaign viewed 685 million times with 29% increase in branded search, generating positive brand awareness
Improved integration process with first branch integrations underway and revenues of approximately $37 million combined revenue
Reduction in filed complex litigated termite claims by 75% and 20% reduction in new warranty claims
Board declared an interim dividend of 3.16p per share, an increase of 14.9%
Continued investment for growth supported by additional $25 million commitment in North America
Encouraging results seen from RIGHT WAY 2 growth plan and integration program
Green shoots of growth and progress on key growth KPIs in the North America Pest Control business
Successful implementation of branch integration program in North America with the first branch integrations underway
Revenue increased by 4% to GBP 2.76 billion, organic revenue up 2.8%
Adjusted operating profit grew by 4.7% to GBP 455 million, and margin increased by 10 basis points
Net debt-to-EBITDA ratio stable at 2.8x, on track for full-year expectations
Interim dividend approved, reflecting confidence in further progress in the year and commitment to progressive dividend policy
Negative
- Despite a 4.7% increase in group adjusted operating profit, the revenue growth was only 4% in the first half, with organic growth at 2.8%.
- North America Pest Control business delivered only 1.5% organic growth in the second quarter, following a 1% growth in the first quarter, indicating slower progress in this key market.
- The increase in statutory revenue was only 1.3% to GBP 2.7 billion, highlighting a slower growth rate compared to previous periods.
- The net debt-to-EBITDA ratio remained at 2.8x, showing limited progress in deleveraging towards the target range of between 2 and 2.5x as committed at the time of the Terminix acquisition.
- The cash interest payments increased by GBP 10 million year-on-year, indicating higher financial costs impacting the bottom line.
RTO FAQs
How does RTO typically perform around its earnings report dates?
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RTO Earning Call Sentiment
Rentokil Initial plc (RTO) Q2 2024 Earnings Call Transcript
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00:00
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RTO.N
1.32%Positive
The earnings call presents a mixed picture. Financial performance is stable with revenue growth and increased dividends, but there are concerns about integration risks, customer retention, and North American growth. The Q&A highlights uncertainties, especially in North America and the distribution business. While there are positive elements like cost synergies and strategic investments, the lack of clear guidance on certain issues tempers enthusiasm. Overall, the sentiment is balanced, suggesting a neutral stock price movement.
