Pest control specialist Rentokil has posted a revenue increase, as it navigates the fallout from a recent profit warning and pressure from activist investors.
In a market update, the company reported a 3.6% year-on-year revenue rise to £1.44bn for the three months to 30 September, up from £1.39bn, as reported by .
The news sparked an 8% surge in Rentokil's shares in early trading.
Revenue growth was driven by its North American arm, which saw a 1.4% year-on-year increase, while Europe and Asia recorded rises of 4.7% and 6.5%, respectively.
However, currency fluctuations impacted overall revenue, with growth at actual exchange rates remaining flat at £1.38bn.
Rentokil's shares took a hit last month after the company issued a profit warning, citing an £80m operating profit impact due to increased US staffing costs to meet peak demand that ultimately fell short.
The warning prompted shareholders, including activist hedge fund Trian Partners, led by Nelson Peltz, to call for changes at the company.
Investors expressed concerns about Rentokil's integration of Terminix, a US business acquired in 2022, and urged the company's chief financial officer and US head to step down.
In its latest update, Rentokil stated that the Terminix integration "continues to go well", but will reassess performance "early in the New Year". While Rentokil's CFO Stuart Ingall-Tombs had initially been tipped for departure, instead Trians head of research Brian Baldwin has taken a seat on the board as a non-executive director.
Rentokil's chief, Andy Ransom, commented: "In North America, we recognise the business has underperformed and we are focused on delivering the operational improvements required. We are expanding our initiatives to increase organic growth and we are taking action to mitigate cost overruns."
He continued: "The Terminix integration continues to progress well and we have a full programme of activity for the remainder of 2024."
Looking ahead, Ransom added: "In the New Year, we will review the early results of new fourth-quarter integration activities, including the piloting of new satellite branches, and new technician and sales pay plans, in addition to assessing the effectiveness of our expanded growth initiatives."
Confident about future prospects, he affirmed: "Post integration, we remain strongly optimistic that our business will lead a highly resilient, growing market."
