By Shanima A
(Reuters) -British pest control company Rentokil reported a 2.6% rise in third-quarter revenue and announced a management overhaul at its struggling North American business on Thursday, sending its shares 8% up.
It said in a statement its North America finance chief has left the business and the group has appointed a new chief marketing officer and chief operating officer in the region. It has yet to appoint a new CFO.
News of the changes helped offset investor disappointment after Rentokil said its profit and margins in 2025 will be hit by a two- to three-month delay in realising the benefits of its acquisition of U.S. rival Terminix.
The company also said organic revenue growth in North America, its biggest market, was 1.4% in the third quarter, indicating that it was tracking ahead of the 1% rise it guided last month for the region in the second half.
Rentokil had last month flagged weaker-than-expected sales in North America – the third warning in the past year. At the time, CEO Andy Ransom had also expressed disappointment on the execution of the group’s strategy.
“Results suggest some early traction on growth plan,” brokerage Jefferies said in a note.
Rentokil said its North America business has “underperformed” and has been hurt by higher-than-expected material and consumable costs, partly due to inflation. It has also cut about 250 jobs in the region.
Rentokil and rival Rollins account for roughly half of the U.S. pest control market, with Rentokil the larger player following its $6.7 billion acquisition of Terminix in 2021.
It said synergies from its integration with Terminix would be delayed by two- to three-months as it pilots new pay plans and new satellite branches in the fourth quarter and plans to review the programs early in the new year.
(Reporting by Yamini Kalia and Shanima A in Bengaluru; Editing by Subhranshu Sahu, Savio D’Souza and Emelia Sithole-Matarise)
