Rentokil shares rise 8.93% on revenue growth, buyback approval
Key Facts
Rentokil Initial shares rose 8.93% in early London trading on 22 October 2026 after the release of its third-quarter trading update, according to AskTraders. In the update issued the same day, the company reported group revenue of 1,890 million dollars, up from 1,810 million dollars in the third quarter of 2025. Reported year-on-year revenue growth was 4.4%, while growth at constant exchange rates was 4.0% over the same period. Organic group revenue growth was 3.4%, according to the company's statement, with pest control performance varying between North America and its international operations. The revenue growth announcement was accompanied by board approval of a share buyback programme and an unchanged annual profit outlook in line with current market expectations.
In operational terms, North American pest control revenue grew organically by 2.4% in the third quarter of 2026, according to Rentokil's update. The company attributed growth in the business to support from residential operations, alongside an improvement in large commercial accounts in the region. International pest control delivered organic growth of 5.7% in the same quarter, outpacing North America. The company said pricing and customer retention in Britain supported its international business during the period. International operations therefore recorded faster organic growth than both North American pest control and group revenue overall in the third quarter.
In North American residential operations, lead flow improved in September after weakness in July and August, according to the company. The decline in lead flow narrowed to about 1% in September, an improvement on the weakness earlier in the quarter. When reporting its first-half results, Rentokil had warned of weakness that began in the business towards the end of the second quarter and continued into July. It said at the time it had seen "some weakness in North American residential lead flow towards the end of the second quarter and through July". Operationally, the company is separating its residential and commercial businesses in North America. The separation aims to improve customer focus and reduce complexity, according to the trading update. The company plans to fund the investments required in the region entirely through savings from procurement, offshoring and outsourcing.
On its business portfolio, Rentokil agreed to sell SOLitude Lake Management to Bain Capital for 230 million dollars, according to its statement. The company estimates expected net cash proceeds from the sale, after tax, at about 180 million dollars. The first figure represents the agreed transaction consideration, while the second represents the company's estimate of the cash it will receive after tax. As background to its financial position, first-half results showed a decline in the ratio of net debt to adjusted earnings before interest, taxes, depreciation and amortisation. The ratio stood at 2.4 times at the end of June 2026, compared with 2.8 times at the end of June 2025, according to the half-year results statement.
On capital allocation for the period ahead, the board set the share buyback programme at 200 million dollars. Rentokil said the programme would begin shortly, targeting completion by the announcement of its annual results. Alongside the buyback, the company expects to spend about 100 million dollars on acquisitions during the 2026 financial year, according to its update. The group maintained its annual profit outlook in line with "current market expectations", as the statement put it. The outlook was maintained alongside revenue growth and improved residential lead flow, without an announcement of an increase in profit forecasts. Rentokil is scheduled to announce its preliminary annual results on 25 February 2027, the date by which the share buyback programme is targeted for completion.