(Alliance News) - Pest control firm Rentokil Initial PLC upped its dividend by 15% on Thursday following a "strong" annual performance in which it beat revenue growth targets.
The FTSE 100 company also said Chief Financial Officer Jeremy Townsend is to retire in the second half of 2020. Rentokil's North America finance chief Stuart Ingall-Tombs will become group CFO.
Camberley, Surrey-based Rentokil has declared a final dividend of 3.64 pence per share, taking the total to 5.15p, just over 15% higher than the payout in 2018.
The company has also swung to a pretax profit of GBP338.5 million, after a loss of GBP114.1 million in 2018. Rentokil's figure last year had been hit by a pension settlement worth nearly GBP350 million.
Adjusted pretax profit was 11% higher at actual exchange rates, an 9.8% at constant currency, at GBP340.9 million.
Rentokil achieved 9.8% revenue growth at actual exchange rates to GBP2.71 billion, with constant currency revenue growth 8.5%. Organic revenue growth was 4.5%, beating Rentokil's medium-term target of 3% to 4% annual organic growth.
The 9.8% overall revenue growth achieved in 2019 beat the medium-term target of 5% to 8% growth annually.
Rentokil, whose strategy involves regular bolt-on acquisitions, said it was an "excellent" year for M&A, purchasing 41 business for a total cash spend of GBP316.5 million.
Chief Executive Andy Ransom commented: "The company performed strongly in 2019 with a combination of above-target organic growth and disciplined execution of M&A.
"Organic growth was driven by our increasing presence in growth markets, higher levels of customer retention and a strong innovation programme."
Revenue growth in the core Pest Control division was 13% at actual rates, reaching GBP1.73 billion. Operating profit in the unit was 13% higher.
In Hygiene, revenue growth at actual rates was 5.2% to GBP543.7 million, and operating profit climbed 7.5%. Protect & Enhance revenue climbed 3.5% to GBP397.7 million, and operating profit rose 3.7% to GBP47.4 million.
Looking ahead, Rentokil said it has made a "good" start to 2020, and it has maintained medium-term growth targets.
The firm had previously, in July last year, expected a positive foreign exchange impact on profit in 2020 between GBP15 million and GBP20 million, but a stronger sterling means it now sees profit being hurt by GBP10 million to GBP15 million.
"Looking forward into the new decade, key demographic trends such as urbanisation will enlarge our global pest control and hygiene markets, while we continue to focus on the relentless execution of our plan. We are confident of delivering further operational and financial progress in 2020," said CEO Ransom.
In a further board change, Rentokil also announced Cathy Turner will be joining as a non-executive director from the start of April. Turner is a former executive at Lloyds Banking Group PLC and Barclays PLC.
Rentokil shares were 1.2% lower on Thursday morning in early trade in London at 489.50p each.
By George Collard; georgecollard@alliancenews.com
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