LSE:RTO

Stock Analysis Report

Executive Summary

Rentokil Initial plc, through its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally.

Snowflake

Fundamentals

High growth potential with imperfect balance sheet.


Similar Companies

Share Price & News

How has Rentokil Initial's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-3.8%

LSE:RTO

0.1%

GB Commercial Services

1.6%

GB Market


1 Year Return

35.1%

LSE:RTO

9.8%

GB Commercial Services

0.3%

GB Market

RTO outperformed the Commercial Services industry which returned 9.8% over the past year.

RTO outperformed the Market in United Kingdom of Great Britain and Northern Ireland which returned 0.3% over the past year.


Share holder returns

RTOIndustryMarket
7 Day-3.8%0.1%1.6%
30 Day-5.0%3.9%5.0%
90 Day9.0%5.6%1.2%
1 Year36.8%35.1%13.2%9.8%5.1%0.3%
3 Year102.3%94.5%19.5%8.6%23.7%9.0%
5 Year278.7%251.5%24.4%4.1%29.9%2.5%

Price Volatility Vs. Market

How volatile is Rentokil Initial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

9.29x

Price to Book (PB) ratio


Intrinsic Value Based on Future Cash Flows

Rentokil Initial's share price is above the future cash flow value, it's not available at a moderate discount (< 20%).

Rentokil Initial's share price is above the future cash flow value, it's not available at a substantial discount (< 40%).


Price Based on Earnings

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

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


Price Based on Value of Assets

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


Next Steps

Future Growth

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

20.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Rentokil Initial's revenue is expected to grow by 5.1% yearly, however this is not considered high growth (20% yearly).

Rentokil Initial's earnings are expected to grow significantly at over 20% yearly.

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

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

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


Earnings per Share Growth Estimates


Future Return on Equity

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


Next Steps

Past Performance

How has Rentokil Initial performed over the past 5 years?

2.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

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.


Return on Equity

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.


Return on Assets

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.


Return on Capital Employed

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.


Next Steps

Financial Health

How is Rentokil Initial's financial position?


Financial Position Analysis

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.


Debt to Equity History and Analysis

Rentokil Initial's level of debt (192.7%) 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 (24%, greater than 20% of total debt).

Rentokil Initial is making a loss, therefore interest payments are not well covered by earnings.


Balance Sheet

Low level of unsold assets.

Debt is not covered by short term assets, assets are 0.7x debt.


Next Steps

Dividend

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

1.33%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Rentokil Initial's pays a lower dividend yield than the bottom 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (1.99%).

Rentokil Initial's dividend is below the markets top 25% of dividend payers in United Kingdom of Great Britain and Northern Ireland (5.5%).

Rentokil Initial is not paying a notable dividend for United Kingdom of Great Britain and Northern Ireland, therefore no need to check if the payments are stable.

Rentokil Initial is not paying a notable dividend for United Kingdom of Great Britain and Northern Ireland, therefore no need to check if the payments are increasing.


Current Payout to Shareholders

No need to calculate the sustainability of Rentokil Initial's dividends as it is not paying a notable one for United Kingdom of Great Britain and Northern Ireland.


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (2.8x coverage).


Next Steps

Management

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

5.9yrs

Average management tenure


CEO

Andy Ransom (56yo)

5.9yrs

Tenure

UK£4,406,700

Compensation

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 Non-Executive Director and Senior Independent Director of Se ...


CEO Compensation Analysis

Andy's remuneration is about average for companies of similar size in United Kingdom of Great Britain and Northern Ireland.

Andy's compensation has increased whilst company is loss making.


Management Age and Tenure

5.9yrs

Average Tenure

54yo

Average Age

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


Board Age and Tenure

6.3yrs

Average Tenure

56yo

Average Age

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


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Andy Ransom (56yo)

    CEO & Executive Director

    • Tenure: 5.9yrs
    • Compensation: UK£4.41m
  • Daragh P. Fagan (49yo)

    Group General Counsel & Company Secretary

    • Tenure: 6yrs
  • Jeremy Townsend (55yo)

    CFO & Executive Director

    • Tenure: 9.1yrs
    • Compensation: UK£2.71m
  • Malcolm Padley

    Director of Corporate Communications

    • Tenure: 13.7yrs
  • Katharine Rycroft

    Head of Investor Relations

    • Tenure: 0yrs
  • Vanessa Evans (50yo)

    Group Human Resources Director

    • Tenure: 3.7yrs
  • Stuart Ingall-Tombs

    Chief Financial Officer of Europe

    • Tenure: 4.9yrs
  • John Myers (61yo)

    Managing Director of North America

    • Tenure: 5.9yrs
  • Phill Wood (53yo)

    Managing Director of UK & Rest of World

    • Tenure: 5.9yrs
  • Gary Booker

    Chief Marketing

    • Tenure: 1.7yrs

Board Members

  • Ian Harley (68yo)

    Chairman of Rentokil Initial Pension Trustee Limited

    • Tenure: 12.2yrs
    • Compensation: UK£30.00k
  • Andy Ransom (56yo)

    CEO & Executive Director

    • Tenure: 5.9yrs
    • Compensation: UK£4.41m
  • Richard Solomons (58yo)

    Chairman

    • Tenure: 0.3yrs
  • Jeremy Townsend (55yo)

    CFO & Executive Director

    • Tenure: 9.1yrs
    • Compensation: UK£2.71m
  • Julie Southern (60yo)

    Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: UK£75.00k
  • Linda Yueh

    Non-Executive Director

    • Tenure: 1.8yrs
    • Compensation: UK£60.00k
  • Angela Seymour-Jackson (53yo)

    Non-Executive Director

    • Tenure: 7.5yrs
    • Compensation: UK£60.00k
  • John Pettigrew (50yo)

    • Tenure: 0.3yrs
    • Compensation: UK£60.00k

Company Information

Rentokil Initial plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Rentokil Initial plc
  • Ticker: RTO
  • Exchange: LSE
  • Founded: 1903
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: UK£7.948b
  • Shares outstanding: 1.84b
  • Website: https://www.rentokil-initial.com

Number of Employees


Location

  • Rentokil Initial plc
  • Riverbank
  • Meadows Business Park
  • Camberley
  • Surrey
  • GU17 9AB
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RTOLSE (London Stock Exchange)YesOrdinary SharesGBGBPMay 1992
RKLI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 1992
RTO1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 1992
RTOLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPMay 1992
RTOK.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDSep 1995

Biography

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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/16 20:34
End of Day Share Price2019/09/16 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.