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 Analysis

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

Stable Share Price: RTO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.0%

RTO

-0.2%

GB Commercial Services

-0.8%

GB Market


1 Year Return

38.1%

RTO

25.9%

GB Commercial Services

8.5%

GB Market

Return vs Industry: RTO exceeded the UK Commercial Services industry which returned 25.9% over the past year.

Return vs Market: RTO exceeded the UK Market which returned 8.5% over the past year.


Shareholder returns

RTOIndustryMarket
7 Day-1.0%-0.2%-0.8%
30 Day0.6%3.5%-0.3%
90 Day-1.8%5.0%2.1%
1 Year39.7%38.1%29.7%25.9%14.1%8.5%
3 Year118.1%109.7%27.9%17.0%19.2%4.0%
5 Year316.1%286.3%40.5%17.7%41.8%9.5%

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 compared to its fair value and its price relative to the market?

9.48x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: RTO (£4.4) is trading above our estimate of fair value (£3.17)

Significantly Below Fair Value: RTO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RTO is unprofitable, so we can't compare its PE Ratio to the Commercial Services industry average.

PE vs Market: RTO is unprofitable, so we can't compare its PE Ratio to the UK market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RTO's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RTO is overvalued based on its PB Ratio (9.5x) compared to the GB Commercial Services industry average (2.3x).


Next Steps

Future Growth

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

10.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RTO is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (0.5%).

Earnings vs Market: RTO is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: RTO's is expected to become profitable in the next 3 years.

Revenue vs Market: RTO's revenue (5.1% per year) is forecast to grow faster than the UK market (3.6% per year).

High Growth Revenue: RTO's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RTO's Return on Equity is forecast to be high in 3 years time (21.1%)


Next Steps

Past Performance

How has Rentokil Initial performed over the past 5 years?

2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RTO is currently unprofitable.

Growing Profit Margin: RTO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RTO is unprofitable, but has reduced losses over the past 5 years at a rate of 2.2% per year.

Accelerating Growth: Unable to compare RTO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RTO is unprofitable, making it difficult to compare its past year earnings growth to the Commercial Services industry (16.1%).


Return on Equity

High ROE: RTO has a negative Return on Equity (-11.25%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Rentokil Initial's financial position?


Financial Position Analysis

Short Term Liabilities: RTO's short term assets (£1.1B) do not cover its short term liabilities (£1.4B).

Long Term Liabilities: RTO's short term assets (£1.1B) do not cover its long term liabilities (£1.5B).


Debt to Equity History and Analysis

Debt Level: RTO's debt to equity ratio (192.7%) is considered high.

Reducing Debt: RTO had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: RTO's debt is well covered by operating cash flow (24%).

Interest Coverage: RTO is unprofitable, therefore interest payments are not well covered by earnings.


Balance Sheet

Inventory Level: RTO has a low level of unsold assets or inventory.

Debt Coverage by Assets: RTO's 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?

1.02%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%2.0%markettop25%5.3%industryaverage2.8%forecastin3Years1.3%

Current dividend yield vs market & industry

Notable Dividend: RTO's dividend (1.02%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: RTO's dividend (1.02%) is low compared to the top 25% of dividend payers in the UK market (5.25%).


Stability and Growth of Payments

Stable Dividend: RTO is not paying a notable dividend for the UK market, therefore no need to check if payments are stable.

Growing Dividend: RTO is not paying a notable dividend for the UK market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: RTO is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RTO's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

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

6.2yrs

Average management tenure


CEO

Andy Ransom (56yo)

6.2yrs

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

Compensation vs Market: Andy's total compensation ($USD5.77M) is about average for companies of similar size in the UK market ($USD4.73M).

Compensation vs Earnings: Andy's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

6.2yrs

Average Tenure

54yo

Average Age

Experienced Management: RTO's management team is seasoned and experienced (6.2 years average tenure).


Board Age and Tenure

6.6yrs

Average Tenure

56yo

Average Age

Experienced Board: RTO's board of directors are considered experienced (6.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Andy Ransom (56yo)

    CEO & Executive Director

    • Tenure: 6.2yrs
    • Compensation: UK£4.41m
  • Daragh P. Fagan (49yo)

    Group General Counsel & Company Secretary

    • Tenure: 6.3yrs
  • Jeremy Townsend (55yo)

    CFO & Executive Director

    • Tenure: 9.3yrs
    • Compensation: UK£2.71m
  • Malcolm Padley

    Director of Corporate Communications

    • Tenure: 13.9yrs
  • Katharine Rycroft

    Head of Investor Relations

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

    Group Human Resources Director

    • Tenure: 3.9yrs
  • Stuart Ingall-Tombs

    Chief Financial Officer of Europe

    • Tenure: 5.2yrs
  • John Myers (61yo)

    Managing Director of North America

    • Tenure: 6.2yrs
  • Phill Wood (53yo)

    Managing Director of UK & Rest of World

    • Tenure: 6.2yrs
  • Gary Booker

    Chief Marketing

    • Tenure: 1.9yrs

Board Members

  • Ian Harley (68yo)

    Chairman of Rentokil Initial Pension Trustee Limited

    • Tenure: 12.4yrs
    • Compensation: UK£30.00k
  • Andy Ransom (56yo)

    CEO & Executive Director

    • Tenure: 6.2yrs
    • Compensation: UK£4.41m
  • Richard Solomons (58yo)

    Independent Chairman

    • Tenure: 0.6yrs
  • Jeremy Townsend (55yo)

    CFO & Executive Director

    • Tenure: 9.3yrs
    • Compensation: UK£2.71m
  • Julie Southern (60yo)

    Non-Executive Director

    • Tenure: 5.4yrs
    • Compensation: UK£75.00k
  • Linda Yueh

    Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: UK£60.00k
  • Angela Seymour-Jackson (53yo)

    Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£60.00k
  • John Pettigrew (50yo)

    • Tenure: 0.6yrs
    • 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£8.002b
  • 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 Analysis2019/12/08 20:35
End of Day Share Price2019/12/06 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.