Rentokil Initial

LSE:RTO

Snowflake Description

High growth potential with imperfect balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.

RTO

LSE

£7B

Market Cap

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Last updated 2019/04/25 20:34

Company description

Rentokil Initial plc, through its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally. The last earnings update was 29 days ago. More info.

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RTO Share Price and Events

7 Day Returns

3.1%

LSE:RTO

1.9%

GB Commercial Services

1.2%

GB Market

1 Year Returns

30.1%

LSE:RTO

8.1%

GB Commercial Services

2.5%

GB Market

RTO Shareholder Return

	7 Day	30 Day	90 Day	1 Year	3 Year	5 Year
Rentokil Initial (RTO)	3.1%	11.5%	15.8%	30.1%	118.5%	225.6%
GB Commercial Services	1.9%	13.6%	16.3%	8.1%	20.3%	-3.5%
GB Market	1.2%	5.3%	9.8%	2.5%	16.9%	6.7%

1 Year Return vs Industry and Market

RTO outperformed the Commercial Services industry which returned 8.1% over the past year.
RTO outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned 2.5% over the past year.

Price Volatility

RTO

Industry

5yr Volatility vs Market

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RTO Value

Is Rentokil Initial undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

Here we compare the current share price of Rentokil Initial to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Rentokil Initial.

LSE:RTO Discounted Cash Flow Data Sources
Data Point	Source	Value
Valuation Model		2 Stage Free Cash Flow to Equity
Levered Free Cash Flow	Average of 13 Analyst Estimates (S&P Global)	See below
Discount Rate (Cost of Equity)	See below	7.2%
Perpetual Growth Rate	10-Year GB Government Bond Rate	1.2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for LSE:RTO
Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year GB Govt Bond Rate	1.2%
Equity Risk Premium	S&P Global	6.7%
Commercial Services Unlevered Beta	Simply Wall St/ S&P Global	0.74
Re-levered Beta	= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) = 0.735 (1 + (1- 19%) (17.79%))	0.893
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	0.89
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 1.23% + (0.893 * 6.65%)	7.17%

Discounted Cash Flow Calculation for LSE:RTO using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Rentokil Initial is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

LSE:RTO DCF 1st Stage: Next 10 year cash flow forecast
	Levered FCF (GBP, Millions)	Source	Present Value Discounted (@ 7.17%)
2019	254.65	Analyst x8	237.62
2020	280.70	Analyst x8	244.41
2021	274.43	Analyst x6	222.97
2022	271.10	Est @ -1.21%	205.53
2023	269.80	Est @ -0.48%	190.86
2024	269.88	Est @ 0.03%	178.15
2025	270.94	Est @ 0.39%	166.88
2026	272.67	Est @ 0.64%	156.72
2027	274.90	Est @ 0.82%	147.43
2028	277.48	Est @ 0.94%	138.86
Present value of next 10 years cash flows			£1,889.41

LSE:RTO DCF 2nd Stage: Terminal Value
	Calculation	Result
Terminal Value	= FCF₂₀₂₈ × (1 + g) ÷ (Discount Rate – g) = £277.48 × (1 + 1.23%) ÷ (7.17% – 1.23%)	£4,727.86
Present Value of Terminal Value	= Terminal Value ÷ (1 + r)¹⁰ = £4,727.86 ÷ (1 + 7.17%)¹⁰	£2,365.96

LSE:RTO Total Equity Value
	Calculation	Result
Total Equity Value	= Present value of next 10 years cash flows + Terminal Value = £1,889.41 + £2,365.96	£4,255.38
Equity Value per Share (GBP)	= Total value / Shares Outstanding = £4,255.38 / 1,841.13	£2.31

LSE:RTO Discount to Share Price
	Calculation	Result
Value per share (GBP)	From above.	£2.31
Current discount	Discount to share price of £3.87 = -1 x (£3.87 - £2.31) / £2.31	-67.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

The current share price of Rentokil Initial is above its future cash flow value.

Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Rentokil Initial's earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are Rentokil Initial's earnings available for a low price, and how does this compare to other companies in the same industry?

Raw Data

LSE:RTO PE (Price to Earnings) Ratio Data Sources
Data Point	Source	Value
Earnings Per Share *	Company Filings (2018-12-31) in GBP	£-0.05
LSE:RTO Share Price **	LSE (2019-04-25) in GBP	£3.87
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry PE Ratio	Median Figure of 28 Publicly-Listed Commercial Services Companies	20.22x
United Kingdom of Great Britain and Northern Ireland Market PE Ratio	Median Figure of 797 Publicly-Listed Companies	16.3x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Rentokil Initial.

LSE:RTO PE (Price to Earnings) Ratio Calculation
	Calculation	Outcome
PE Ratio	= LSE:RTO Share Price ÷ EPS (both in GBP) = 3.87 ÷ -0.05	-72.39x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Rentokil Initial is loss making, we can't compare its value to the GB Commercial Services industry average.
Rentokil Initial is loss making, we can't compare the value of its earnings to the United Kingdom of Great Britain and Northern Ireland market.

Price based on expected Growth

Does Rentokil Initial's expected growth come at a high price?

Raw Data

LSE:RTO PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point	Source	Value
PE Ratio	See PE Ratio Section	-72.39x
Net Income Annual Growth Rate	See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 13 Analysts	59.4%per year
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry PEG Ratio	Median Figure of 18 Publicly-Listed Commercial Services Companies	1.4x
United Kingdom of Great Britain and Northern Ireland Market PEG Ratio	Median Figure of 566 Publicly-Listed Companies	1.5x

*Line of best fit is calculated by linear regression .

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Unable to calculate PEG ratio for Rentokil Initial, we can't assess if its growth is good value.

Price based on value of assets

What value do investors place on Rentokil Initial's assets?

Raw Data

LSE:RTO PB (Price to Book) Ratio Data Sources
Data Point	Source	Value
Book Value per Share	Company Filings (2018-12-31) in GBP	£0.45
LSE:RTO Share Price *	LSE (2019-04-25) in GBP	£3.87
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry PB Ratio	Median Figure of 37 Publicly-Listed Commercial Services Companies	1.67x
United Kingdom of Great Britain and Northern Ireland Market PB Ratio	Median Figure of 1,367 Publicly-Listed Companies	1.52x

LSE:RTO PB (Price to Book) Ratio Calculation
	Calculation	Outcome
PB Ratio	= LSE:RTO Share Price ÷ Book Value per Share (both in GBP) = 3.87 ÷ 0.45	8.52x

* Primary Listing of Rentokil Initial.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Rentokil Initial is overvalued based on assets compared to the GB Commercial Services industry average.

Value checks

We assess Rentokil Initial's value by looking at:

Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
Is the PE ratio less than the market average, and/ or less than the Commercial Services industry average (and greater than 0)? (2 checks)
Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
Is the PB ratio less than the Commercial Services industry average (and greater than 0)? (1 check)

Full details on the Value part of the Simply Wall St company analysis model.

RTO Future Performance

How is Rentokil Initial expected to perform in the next 1 to 3 years based on estimates from 13 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!

59.4%

Expected annual growth in earnings.

Earnings growth vs Low Risk Savings

Is Rentokil Initial expected to grow at an attractive rate?

Rentokil Initial's earnings growth is expected to exceed the low risk savings rate of 1.2%.

Growth vs Market Checks

Rentokil Initial's earnings growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.
Rentokil Initial's revenue growth is expected to exceed the United Kingdom of Great Britain and Northern Ireland market average.

Annual Growth Rates Comparison

Raw Data

LSE:RTO Future Growth Rates Data Sources
Data Point	Source	Value (per year)
LSE:RTO Future Earnings Growth Rate	Line of Best Fit* through Consensus Estimate Earnings of 13 Analysts	59.4%
LSE:RTO Future Revenue Growth Rate	Line of Best Fit* through Consensus Estimate Revenue of 13 Analysts	4.9%
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry Earnings Growth Rate	Market Cap Weighted Average	28.2%
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry Revenue Growth Rate	Market Cap Weighted Average	4.2%
United Kingdom of Great Britain and Northern Ireland Market Earnings Growth Rate	Market Cap Weighted Average	11%
United Kingdom of Great Britain and Northern Ireland Market Revenue Growth Rate	Market Cap Weighted Average	4.8%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations

Raw Data

LSE:RTO Analysts Growth Expectations Data Sources
Data Point	Source	Value
Past Financials	Company Filings (3 months ago)	See Below
Future Estimates	Average of up to 13 Analyst Estimates (S&P Global)	See Below

All numbers in GBP Millions and using Trailing twelve months (TTM) annual period rather than quarterly.

LSE:RTO Future Estimates Data
Date (Data in GBP Millions)	Revenue	Cash Flow	Net Income *	Avg. No. Analysts
2021-12-31	2,875	549	268	9
2020-12-31	2,740	517	246	13
2019-12-31	2,643	479	225	10

LSE:RTO Past Financials Data
Date (Data in GBP Millions)	Revenue	Cash Flow	Net Income *
2018-12-31	2,472	364	-98
2018-09-30	2,414	355	46
2018-06-30	2,355	347	190
2018-03-31	2,384	364	436
2017-12-31	2,412	380	683
2017-09-30	2,413	386	683
2017-06-30	2,415	392	682
2017-03-31	2,291	377	425
2016-12-31	2,168	361	168
2016-09-30	2,029	350	151
2016-06-30	1,891	339	134
2016-03-31	1,825	329	129

*GAAP earnings excluding extraordinary items.

High Growth Checks

Rentokil Initial's earnings are expected to grow significantly at over 20% yearly.
Rentokil Initial's revenue is expected to grow by 4.9% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Raw Data

LSE:RTO Past and Future Earnings per Share
Data Point	Source	Value
Past Financials	Company Filings (3 months ago)	See Below
Future Estimates	Average of up to 13 Analyst Estimates (S&P Global)	See Below

All data from Rentokil Initial Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:RTO Future Estimates Data
Date (Data in GBP Millions)	EPS *	EPS High Estimate	EPS Low Estimate	Avg. No. Analysts
2021-12-31	0.15	0.17	0.14	3.00
2020-12-31	0.14	0.15	0.12	8.00
2019-12-31	0.12	0.13	0.11	7.00

LSE:RTO Past Financials Data
Date (Data in GBP Millions)	EPS *
2018-12-31	-0.05
2018-09-30	0.02
2018-06-30	0.10
2018-03-31	0.24
2017-12-31	0.37
2017-09-30	0.37
2017-06-30	0.37
2017-03-31	0.23
2016-12-31	0.09
2016-09-30	0.08
2016-06-30	0.07
2016-03-31	0.07

*GAAP earnings excluding extraordinary items.

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.

Rentokil Initial is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).

Show me more growth companies in the Commercial Services industry

Future performance checks

We assess Rentokil Initial's future performance by looking at:

Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United Kingdom of Great Britain and Northern Ireland market? (1 check)
Is the annual earnings growth rate expected to be above 20%? (1 check)
Is the annual revenue growth rate expected to be above 20%? (1 check)
Is the Return on Equity in 3 years expected to be over 20%? (1 check)

Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Rentokil Initial has a total score of 5/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

RTO Past Performance

How has Rentokil Initial performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare Rentokil Initial's growth in the last year to its industry (Commercial Services).

Past Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.

Rentokil Initial does not make a profit even though their year on year earnings growth rate was positive over the past 5 years.
Unable to compare Rentokil Initial's 1-year earnings growth to the 5-year average as it is not currently profitable.
Unable to compare Rentokil Initial's 1-year growth to the GB Commercial Services industry average as it is not currently profitable.

Earnings and Revenue History

Rentokil Initial's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Raw Data

All data from Rentokil Initial Company Filings, last reported 3 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

LSE:RTO Past Revenue, Cash Flow and Net Income Data
Date (Data in GBP Millions)	Revenue	Net Income *	G+A Expenses	R&D Expenses
2018-12-31	2,472.30	-98.30	1,364.00
2018-09-30	2,413.55	45.70	1,346.50
2018-06-30	2,354.80	189.70	1,329.00
2018-03-31	2,383.55	436.35	1,329.30
2017-12-31	2,412.30	683.00	1,329.60
2017-09-30	2,413.45	682.65	1,264.05
2017-06-30	2,414.60	682.30	1,198.50
2017-03-31	2,291.35	425.05	1,198.05
2016-12-31	2,168.10	167.80	1,197.60
2016-09-30	2,029.45	150.70	1,081.00
2016-06-30	1,890.80	133.60	964.40
2016-03-31	1,824.90	128.95	965.05
2015-12-31	1,759.00	124.30	965.70
2015-09-30	1,750.35	127.15	949.85
2015-06-30	1,741.70	130.00	934.00
2015-03-31	1,741.25	128.05	934.85
2014-12-31	1,740.80	126.10	935.70
2014-09-30	1,746.15	111.95	893.45	0.90
2014-06-30	1,751.50	97.80	851.20	1.80
2014-03-31	1,771.45	89.95	850.40	1.80
2013-12-31	1,791.40	82.10	849.60	1.80
2013-09-30	1,902.30	70.65	959.20	1.80
2013-06-30	2,013.20	59.20	1,068.80	1.80
2013-03-31	2,119.95	65.25	1,068.90	1.80
2012-12-31	2,226.70	71.30	1,069.00	1.80
2012-09-30	2,314.95	13.60	1,157.70	1.90
2012-06-30	2,403.20	-44.10	1,246.40	2.00

*GAAP earnings excluding extraordinary items.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.

It is difficult to establish if Rentokil Initial has efficiently used shareholders’ funds last year (Return on Equity greater than 20%) as it is loss-making.
It is difficult to establish if Rentokil Initial has efficiently used its assets last year compared to the GB Commercial Services industry average (Return on Assets) as it is loss-making.
It is difficult to establish if Rentokil Initial improved its use of capital last year versus 3 years ago (Return on Capital Employed) as it is currently loss-making.

Past performance checks

We assess Rentokil Initial's performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the Commercial Services industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Rentokil Initial has a total score of 0/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

RTO Health

How is Rentokil Initial's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Rentokil Initial's finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

Rentokil Initial's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Rentokil Initial's long term commitments exceed its cash and other short term assets.

Balance sheet

This treemap shows a more detailed breakdown of Rentokil Initial's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.

Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.

Low level of unsold assets.
Debt is not covered by short term assets, assets are 0.6x debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.

Raw Data

All data from Rentokil Initial Company Filings, last reported 3 months ago.

LSE:RTO Past Debt and Equity Data
Date (Data in GBP Millions)	Total Equity	Total Debt	Cash & Short Term Investments
2018-12-31	832.60	1,265.60	132.30
2018-09-30	832.60	1,265.60	132.30
2018-06-30	1,030.60	1,248.20	162.80
2018-03-31	1,030.60	1,248.20	162.80
2017-12-31	934.00	1,234.90	310.60
2017-09-30	934.00	1,234.90	310.60
2017-06-30	834.20	1,519.00	502.70
2017-03-31	834.20	1,519.00	502.70
2016-12-31	360.70	1,337.80	171.10
2016-09-30	360.70	1,337.80	171.10
2016-06-30	317.50	1,258.90	128.30
2016-03-31	317.50	1,258.90	128.30
2015-12-31	212.10	1,236.30	201.90
2015-09-30	212.10	1,236.30	201.90
2015-06-30	141.60	983.70	267.60
2015-03-31	141.60	983.70	267.60
2014-12-31	100.00	1,007.20	239.40
2014-09-30	100.00	1,007.20	239.40
2014-06-30	-46.00	1,032.20	167.90
2014-03-31	-46.00	1,032.20	167.90
2013-12-31	-232.00	1,467.00	435.80
2013-09-30	-232.00	1,467.00	435.80
2013-06-30	-186.40	1,247.10	125.00
2013-03-31	-186.40	1,247.10	125.00
2012-12-31	-127.20	1,251.60	169.10
2012-09-30	-127.20	1,251.60	169.10
2012-06-30	-169.30	1,057.90	98.90

Rentokil Initial's level of debt (152%) compared to net worth is high (greater than 40%).
Rentokil Initial had negative shareholder equity 5 years ago, it is now positive therefore their debt level has improved.
Debt is well covered by operating cash flow (28.7%, greater than 20% of total debt).
Rentokil Initial is making a loss, therefore interest payments are not well covered by earnings.

Financial health checks

We assess Rentokil Initial's financial health by checking for:

Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by operating cash flow? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)

For companies that are loss making and have been so on average in the past we replace the last 2 checks with:

Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)

Full details on the Health part of the Simply Wall St company analysis model.

RTO Dividends

What is Rentokil Initial's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.

Annual Dividend Income

1.16%

Current annual income from Rentokil Initial dividends. Estimated to be 1.45% next year.

If you bought £2,000 of Rentokil Initial shares you are expected to receive £23 in your first year as a dividend.

Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?

Rentokil Initial's pays a lower dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (2.02%).
Rentokil Initial's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.1%).

Annualized Historical and Future Dividends

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.

Raw Data

LSE:RTO Annualized Past and Future Dividends
Data Point	Source	Value
Past Annualized Dividend Yield	S&P Global Market Data	See Below
Past Dividends per Share	Company Filings/ Annualized Dividend Payments	See Below
Future Dividends per Share Estimates	Average of up to 13 Analyst Estimates (S&P Global)	See Below
United Kingdom of Great Britain and Northern Ireland Commercial Services Industry Average Dividend Yield	Market Cap Weighted Average of 24 Stocks	2.9%
United Kingdom of Great Britain and Northern Ireland Market Average Dividend Yield	Market Cap Weighted Average of 705 Stocks	4.2%
United Kingdom of Great Britain and Northern Ireland Minimum Threshold Dividend Yield	10th Percentile	1%
United Kingdom of Great Britain and Northern Ireland Bottom 25% Dividend Yield	25th Percentile	2%
United Kingdom of Great Britain and Northern Ireland Top 25% Dividend Yield	75th Percentile	5.1%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

LSE:RTO Future Dividends Estimate Data
Date (Data in £)	Dividend per Share (annual)	Avg. No. Analysts
2021-12-31	0.07	10.00
2020-12-31	0.05	14.00
2019-12-31	0.05	13.00

LSE:RTO Past Annualized Dividends Data
Date (Data in £)	Dividend per share (annual)	Avg. Yield (%)
2019-03-27	0.045	1.224
2019-02-28	0.045	1.279
2018-04-05	0.039	1.189
2018-03-01	0.039	1.441
2017-07-31	0.035	1.155
2017-04-05	0.034	1.270
2017-02-23	0.034	1.386
2016-04-08	0.029	1.412
2016-02-25	0.029	1.729
2015-04-10	0.026	1.725
2015-02-27	0.026	1.878
2014-04-11	0.023	1.932
2014-02-28	0.023	1.839
2013-03-15	0.021	2.030
2012-03-02	0.020	2.394
2012-03-01	0.020	2.559
2010-04-15	0.000	0.000
2010-02-19	0.000	0.000
2009-11-06	0.000	0.000
2009-07-31	0.000	0.000
2009-05-01	0.000	0.000

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

Whilst dividend payments have been stable, Rentokil Initial has been paying a dividend for less than 10 years.
Dividend payments have increased, but Rentokil Initial only paid a dividend in the past 7 years.

Current Payout to shareholders

What portion of Rentokil Initial's earnings are paid to the shareholders as a dividend.

The company is paying a dividend however it is incurring a loss.

Future Payout to shareholders

Dividends after 3 years are expected to be well covered by earnings (2.6x coverage).

Income/ dividend checks

We assess Rentokil Initial's dividend by checking for:

Firstly is the company paying a notable dividend (greater than 1%) - if not then the rest of the checks are ignored.
Is current dividend yield above the bottom 25% of dividend payers? (1 check)
Is current dividend yield above the top 25% of dividend payers? (1 check)
Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
If they have paid a dividend for 10 years has it increased in this time? (1 check)
How sustainable is the dividend, can Rentokil Initial afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)

Full details on the Dividends part of the Simply Wall St company analysis model.

RTO Management

What is the CEO of Rentokil Initial's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Andy Ransom

COMPENSATION	£4,367,800
AGE	55
TENURE AS CEO	5.5 years

CEO Bio

Mr. Andrew M. Ransom, also known as Andy, has been the Chief Executive Officer of Rentokil Initial plc since October 1, 2013. Mr. Andy serves as Senior Independent Director of Selecta AG since February 01, 2019. Mr. Ransom is Director of Street League. He served as the Executive Director of Corporate Development for Rentokil Initial plc since May 1, 2008. He joined Rentokil Initial plc in 2008 as the Executive Director of the global Pest Control business and was also responsible for its Legal and M&A functions. Mr. Ransom joined Ambius from Imperial Chemical Industries PLC. He served as Executive Vice President of Mergers & Acquisitions, General Counsel and Company Secretary of Imperial Chemical Industries PLC (ICI Plc) since June 30, 2005. During his twenty years at ICI, he was responsible for a number of Group functions (including M&A and Legal) and international businesses (including ICI's Regional and Industrial Division) and worked for a number of years in both Canada and the USA. Mr. Ransom served a Member of Executive Management Team at Imperial Chemical Industries PLC since July 1, 2005. Mr. Ransom served as an Executive Vice President of Imperial Chemical Industries PLC. Mr. Ransom worked as General Counsel for ICI in the Americas as well as in a senior legal role for the Group, based in London. He was with ICI for eighteen years. He joined Group Legal Department at ICI's Head Office in 1987, where he specialised as Senior Mergers and Acquisitions Lawyer. Mr. Ransom was seconded to ICI Explosives in Toronto, Canada in 1996 and became Vice President and General Counsel for ICI in the Americas three years later. A seasoned negotiator and transaction lawyer, he led the legal effort on many ICI deals including the sale of ICI's explosives business to Orica in 1998 and the transaction with Huntsman in 1999. He serves as the Chairman of the Board of Ambius, Inc. and has Executive responsibility for Ambius globally and since January 1, 2009 for both the Asia and Pacific Regions. He is also has functional responsibility for Corporate Development, M&A, Legal, Company Secretariat, Risk and Health and Safety. He has been an Executive Director of Rentokil Initial plc since May 1, 2008. Mr. Ransom served as a Director of Zeneca, Inc. He served as Director of Akzo Nobel India Limited (also known as ICI India Ltd) from April 1, 2007 to April 28, 2008. He serves as Director and Trustee of Street League. He is the Patron of Malaria No More UK. He served as a Director of Lotte Pakistan PTA Limited (also known as Pakistan PTA Ltd) from October 24, 2007 to April 30, 2008. Mr. Ransom is a graduate of the University of Southampton and qualified as a Solicitor in 1987.

CEO Compensation

Andy's compensation has been consistent with company performance over the past year.
Andy's remuneration is higher than average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Management Team Tenure

Average tenure and age of the Rentokil Initial management team in years:

5.5

Average Tenure

Average Age

The average tenure for the Rentokil Initial management team is over 5 years, this suggests they are a seasoned and experienced team.

Management Team

Andy Ransom

TITLE

CEO & Executive Director

COMPENSATION

£4M

AGE

55

TENURE

5.5 yrs

Jeremy Townsend

TITLE

CFO, Chief Information Officer & Executive Director

COMPENSATION

£2M

AGE

54

TENURE

8.7 yrs

Katharine Rycroft

TITLE

Head of Investor Relations

Daragh P. Fagan

49

TENURE

Average tenure and age of the Rentokil Initial board of directors in years:

5.9

Average Tenure

Average Age

The tenure for the Rentokil Initial board of directors is about average.

TITLE

Non-Executive Director

AGE

49

TENURE

1.3 yrs

Who owns this company?

Recent Insider Trading

No 3 month insider trading information.

Recent Insider Transactions

Announced	Type	Name	Entity	Role		Start	End	Shares	Max Price (£)	Value (£)

Management checks

We assess Rentokil Initial's management by checking for:

Is the CEO's compensation unreasonable compared to market cap? (1 check)
Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
Is the average tenure of the management team less than 2 years? (1 check)
Is the average tenure of the board of directors team less than 3 years? (1 check)

Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

RTO News

Simply Wall St News

Should You Worry About Rentokil Initial plc's (LON:RTO) CEO Salary Level?

First, this article will compare CEO compensation with compensation at similar sized companies. … How Does Andy Ransom's Compensation Compare With Similar Sized Companies. … At the time of writing our data says that Rentokil Initial plc has a market cap of UK£6.1b, and is paying total annual CEO compensation of UK£4.4m.

Simply Wall St - 1 month ago – Full article

Should You Buy Rentokil Initial plc (LON:RTO) For Its Dividend?

Historically, Rentokil Initial plc (LON:RTO) has paid a dividend to shareholders. … Let's dig deeper into whether Rentokil Initial should have a place in your portfolio. … View our latest analysis for Rentokil Initial

Simply Wall St - 2 months ago – Full article

Rentokil Initial plc (LON:RTO) Delivered A Better ROE Than Its Industry

With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … By way of learning-by-doing, we'll look at ROE to gain a better understanding of Rentokil Initial plc (LON:RTO). … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St - 3 months ago – Full article

Are Insiders Buying Rentokil Initial plc (LON:RTO) Stock?

So we'll take a look at whether insiders have been buying or selling shares in Rentokil Initial plc (LON:RTO). … But logic dictates you should pay some attention to whether insiders are buying or selling shares. … Rentokil Initial Insider Transactions Over The Last Year.

Simply Wall St - 4 months ago – Full article

Is Rentokil Initial plc's (LON:RTO) High P/E Ratio A Problem For Investors?

This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … Based on the last twelve months, Rentokil Initial's P/E ratio is 31.34. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Simply Wall St - 4 months ago – Full article

Is Rentokil Initial plc's (LON:RTO) Balance Sheet Strong Enough To Weather A Storm?

Mid-caps stocks, like Rentokil Initial plc (LON:RTO) with a market capitalization of UK£5.7b, aren’t the focus of most investors who prefer to direct their investments towards either large-cap or small-cap stocks. … While they are less talked about as an investment category, mid-cap risk-adjusted returns have generally been better than more commonly focused stocks that fall into the small- or large-cap categories. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself.

Simply Wall St - 5 months ago – Full article

Should You Worry About Rentokil Initial plc's (LON:RTO) CEO Pay Check?

This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … We examined companies with market caps from UK£3.0b to UK£9.1b, and discovered that the median CEO compensation of that group was UK£3m. … Thus we can conclude that Andy Ransom receives more in total compensation than the median of a group of companies in the same market, and of similar size to Rentokil Initial plc

Simply Wall St - 6 months ago – Full article

What Should You Know About Rentokil Initial plc's (LON:RTO) Capital Returns?

and looking to gauge the potential return on investment in Rentokil Initial plc (LON:RTO). … Your equity share is granted in return for the capital provided to the business to operate, and in order for an investment to be successful the business has to create earnings from the funds that make up this capital. … Thus, to understand how your money can grow by investing in Rentokil Initial, you need to look at what the company returns to owners for the use of their capital, which can be done in many ways but today we will use return on capital employed (ROCE)

Simply Wall St - 7 months ago – Full article

Rentokil Initial plc (LON:RTO) Delivered A Better ROE Than The Industry, Here’s Why

and want to begin learning the link between company’s fundamentals and stock market performance. … Sustainability can be gauged by a company’s financial leverage – the more debt it has, the higher ROE is pumped up in the short term, at the expense of long term interest payment burden. … Peeling the layers of ROE – trisecting a company’s profitability

Simply Wall St - 8 months ago – Full article

Should Rentokil Initial plc's (LON:RTO) Recent Earnings Worry You?

In this commentary, I will examine Rentokil Initial plc's (LON:RTO) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the commercial services industry performed. … View our latest analysis for Rentokil Initial. … RTO's trailing twelve-month earnings (from 31 December 2017) of UK£683.00m has

Simply Wall St - 8 months ago – Full article

RTO Company Info

Description

Rentokil Initial plc, through its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally. It offers a range of pest control services from rodents to flying and crawling insects, as well as to other forms of wildlife management for commercial and residential customers. The company also provides hygiene services, including the provision and maintenance of products, such as air fresheners, sanitizers, feminine hygiene units, hand dryers, paper and linen towel dispensers, soap dispensers, toilet paper dispensers, and floor protection mats. In addition, it engages in the supply and laundering of workwear, uniforms, cleanroom uniforms, and protective equipment. Further, the company installs and services interior and exterior plant displays, flowers, replica foliage, Christmas decorations, and ambient scenting for commercial businesses; offers property care services consisting of damp proofing, property conservation, and woodworm and wood rot treatment; and provides a range of specialized deep cleaning, and specialist industrial cleaning and disinfection services, including the professional and discreet disinfection of areas that have been exposed to bio-hazardous situations, such as crime and trauma scenes, prison cells, void properties, emergency vehicles, and healthcare establishments. Additionally, it offers a range of healthcare waste management services comprising the collection, disposal, and recycling of hazardous and offensive waste produced by businesses and organizations associated with the provision of healthcare; and color-coded sharps disposal bins to deal with various types of waste. Rentokil Initial plc was founded in 1903 and is headquartered in Camberley, the United Kingdom.

Details

Name:	Rentokil Initial plc
Ticker:	RTO
Exchange:	LSE
Founded:	1903
Market Cap:	£7,115,978,909
Shares outstanding:	1,841,132,965
Website:	http://www.rentokil-initial.com
Address:	Rentokil Initial plc Riverbank, Meadows Business Park, Camberley, Surrey, GU17 9AB, United Kingdom

Listings

Exchange Symbol	Ticker Symbol	Security	Exchange	Country	Currency	Listed on
LSE	RTO	Ordinary Shares	London Stock Exchange	GB	GBP	11. May 1992
OTCPK	RKLI.F	Ordinary Shares	Pink Sheets LLC	US	USD	11. May 1992
DB	RTO1	Ordinary Shares	Deutsche Boerse AG	DE	EUR	11. May 1992
BATS-CHIXE	RTOL	Ordinary Shares	BATS 'Chi-X Europe'	GB	GBP	11. May 1992
OTCPK	RTOK.Y	SPONSORED ADR	Pink Sheets LLC	US	USD	25. Sep 1995

Number of employees

Current staff

39,500

Rentokil Initial employees.

Industry

Industry:	Environmental and Facilities Services
Sector:	Commercial Services

Company Analysis and Financial Data Status

Area	Date (UTC time)
Company Analysis updated:	2019/04/25 20:34
End of day share price update:	2019/04/25 00:00
Last estimates confirmation:	2019/04/24
Last earnings filing:	2019/03/27
Last earnings reported:	2018/12/31
Last annual earnings reported:	2018/12/31

All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

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