Rentokil Initial
Market Cap
UK£7.3b
Last Updated
2020/04/09 20:32 UTC
Data Sources
Company Financials +
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.
Rewards
Risk Analysis
Earnings are forecast to decline by an average of -3.3% per year for the next 3 years
Snowflake Analysis
Adequate balance sheet with limited growth.
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's share price has been volatile over the past 3 months.
Market Performance
7 Day Return
4.5%
RTO
12.8%
GB Commercial Services
8.6%
GB Market
1 Year Return
7.5%
RTO
-14.5%
GB Commercial Services
-19.4%
GB Market
Return vs Industry: RTO exceeded the UK Commercial Services industry which returned -21.7% over the past year.
Return vs Market: RTO exceeded the UK Market which returned -25.9% over the past year.
Shareholder returns
| RTO | Industry | Market | |
|---|---|---|---|
| 7 Day | 4.5% | 12.8% | 8.6% |
| 30 Day | -16.2% | -10.0% | -3.5% |
| 90 Day | -13.8% | -26.5% | -23.0% |
| 1 Year | 7.9%7.5% | -12.2%-14.5% | -15.5%-19.4% |
| 3 Year | 59.7%55.0% | -10.0%-17.6% | -8.8%-19.9% |
| 5 Year | 203.6%185.5% | -1.2%-15.5% | 4.2%-19.0% |
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
1 day ago | Simply Wall St
Calculating The Intrinsic Value Of Rentokil Initial plc (LON:RTO)2 weeks ago | Simply Wall St
Evaluating Rentokil Initial plc’s (LON:RTO) Investments In Its Business1 month ago | Simply Wall St
Should We Be Delighted With Rentokil Initial plc's (LON:RTO) ROE Of 28%?Valuation
Is Rentokil Initial undervalued compared to its fair value and its price relative to the market?
25.56x
Price to Earnings (PE) ratio
Share Price vs. Fair Value
Below Fair Value: RTO (£3.84) is trading below our estimate of fair value (£4.1)
Significantly Below Fair Value: RTO is trading below fair value, but not by a significant amount.
Price To Earnings Ratio
PE vs Industry: RTO is poor value based on its PE Ratio (25x) compared to the Commercial Services industry average (10.7x).
PE vs Market: RTO is poor value based on its PE Ratio (25x) compared to the UK market (12.3x).
Price to Earnings Growth Ratio
PEG Ratio: RTO's earnings are forecast to decline next year, so we can't calculate its PEG ratio.
Price to Book Ratio
PB vs Industry: RTO is overvalued based on its PB Ratio (7.1x) compared to the GB Commercial Services industry average (1.5x).
Next Steps
Future Growth
How is Rentokil Initial forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?
-0.4%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: RTO's earnings are forecast to decline over the next 3 years (-3.3% per year).
Earnings vs Market: RTO's earnings are forecast to decline over the next 3 years (-3.3% per year).
High Growth Earnings: RTO's earnings are forecast to decline over the next 3 years.
Revenue vs Market: RTO's revenue (4.2% per year) is forecast to grow faster than the UK market (2.6% per year).
High Growth Revenue: RTO's revenue (4.2% 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 (21.4%)
Next Steps
Past Performance
How has Rentokil Initial performed over the past 5 years?
-3.2%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: RTO has a large one-off gain of £76.5M impacting its December 31 2019 financial results.
Growing Profit Margin: RTO became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: RTO's earnings have declined by -3.2% per year over the past 5 years.
Accelerating Growth: RTO has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: RTO has become profitable in the last year, making it difficult to compare its past year earnings growth to the Commercial Services industry (11.7%).
Return on Equity
High ROE: Whilst RTO's Return on Equity (28.31%) is high, this metric is skewed due to their high level of debt.
Next Steps
Financial Health
How is Rentokil Initial's financial position?
Financial Position Analysis
Short Term Liabilities: RTO's short term assets (£925.7M) exceed its short term liabilities (£915.8M).
Long Term Liabilities: RTO's short term assets (£925.7M) do not cover its long term liabilities (£1.5B).
Debt to Equity History and Analysis
Debt Level: RTO's debt to equity ratio (114.1%) is considered high.
Reducing Debt: RTO's debt to equity ratio has reduced from 978.6% to 114.1% over the past 5 years.
Debt Coverage: RTO's debt is well covered by operating cash flow (40.5%).
Interest Coverage: RTO's interest payments on its debt are well covered by EBIT (7.2x coverage).
Balance Sheet
Next Steps
Dividend
What is Rentokil Initial's current dividend yield, its reliability and sustainability?
1.31%
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: RTO's dividend (1.34%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (2.66%).
High Dividend: RTO's dividend (1.34%) is low compared to the top 25% of dividend payers in the UK market (7.4%).
Stability and Growth of Payments
Stable Dividend: Whilst dividend payments have been stable, RTO has been paying a dividend for less than 10 years.
Growing Dividend: RTO's dividend payments have increased, but the company has only paid a dividend for 8 years.
Current Payout to Shareholders
Dividend Coverage: With its reasonably low payout ratio (33.6%), RTO's dividend payments are well covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: RTO's dividends in 3 years are forecast to be well covered by earnings (36.3% payout ratio).
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
6.5yrs
Average management tenure
CEO
Andy Ransom (56yo)
6.5s
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 ($USD5.40M) is above average for companies of similar size in the UK market ($USD3.35M).
Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.
Leadership Team
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Executive Director | 6.5yrs | UK£4.41m | 0.085% £6.1m | |
| CFO & Executive Director | 9.67yrs | UK£2.71m | 0.040% £2.9m | |
| Chief Information Officer | 1yr | no data | no data | |
| Head of Investor Relations | no data | no data | no data | |
| Group General Counsel & Company Secretary | 6.58yrs | no data | no data | |
| Director of Corporate Communications | 14.25yrs | no data | no data | |
| Chief Marketing | 2.25yrs | no data | no data | |
| Group Human Resources Director | 4.25yrs | no data | no data | |
| Chief Financial Officer of Europe | 5.5yrs | no data | no data | |
| Managing Director of North America | 6.5yrs | no data | no data |
6.5yrs
Average Tenure
55yo
Average Age
Experienced Management: RTO's management team is seasoned and experienced (6.5 years average tenure).
Board Members
| Name | Position | Tenure | Compensation | Ownership |
|---|---|---|---|---|
| CEO & Executive Director | 6.5yrs | UK£4.41m | 0.085% £6.1m | |
| CFO & Executive Director | 9.67yrs | UK£2.71m | 0.040% £2.9m | |
| Chairman of Rentokil Initial Pension Trustee Limited | 12.75yrs | UK£30.00k | no data | |
| Non-Executive Director | no data | no data | no data | |
| Non Executive Chairman | 0.92yr | no data | 0.0014% £98.0k | |
| Non-Executive Independent Director | 5.75yrs | UK£75.00k | 0.00027% £19.6k | |
| Non-Executive Independent Director | 2.42yrs | UK£60.00k | 0.000090% £6.5k | |
| Non-Executive Independent Director | 8.08yrs | UK£60.00k | 0.00057% £41.4k | |
| Senior Independent Director | 0.92yr | UK£60.00k | 0.00054% £39.2k |
6.9yrs
Average Tenure
56yo
Average Age
Experienced Board: RTO's board of directors are considered experienced (6.9 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
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.
Top Shareholders
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£7.261b
- Shares outstanding: 1.85b
- Website: https://www.rentokil-initial.com
Number of Employees
Location
- Rentokil Initial plc
- Riverbank
- Meadows Business Park
- Camberley
- Surrey
- GU17 9AB
- United Kingdom
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| RTO | LSE (London Stock Exchange) | Yes | Ordinary Shares | GB | GBP | May 1992 |
| RKLI.F | OTCPK (Pink Sheets LLC) | Yes | Ordinary Shares | US | USD | May 1992 |
| RTO1 | DB (Deutsche Boerse AG) | Yes | Ordinary Shares | DE | EUR | May 1992 |
| RTOL | BATS-CHIXE (BATS 'Chi-X Europe') | Yes | Ordinary Shares | GB | GBP | May 1992 |
| OXRTO | SWX (SIX Swiss Exchange) | Yes | Ordinary Shares | CH | GBP | May 1992 |
| RTOK.Y | OTCPK (Pink Sheets LLC) | SPONSORED ADR | US | USD | Sep 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 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 and hand sanitizer 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.
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2020/04/09 20:32 |
| End of Day Share Price | 2020/04/09 00:00 |
| Earnings | 2019/12/31 |
| Annual Earnings | 2019/12/31 |
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.