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Oct. 22, 2020, 2:35 a.m. EDT

Rentokil revenue rises, boosted by hygiene unit

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By Sabela Ojea

Rentokil Initial PLC said Thursday that it benefited from revenue growth in the third quarter, boosted by a strong performance at its hygiene business and a return to pest-control growth.

The pest-control, hygiene and workwear services provider said continuing revenue---one of the company's preferred metrics, which shows the performance of continuing operations including acquisitions after removing the effect of disposed or closed businesses--in the third quarter rose by 5.5% to 754.6 million pounds ($992.1 million) at actual exchange rates, or by 9.8% at constant exchange rates.

Its hygiene business grew by 53% versus growth of 16% in the second quarter, while its pest control area grew by 1.3%, compared with a decline of 5.9% in the previous quarter.

Total disinfection revenue rose 54% to GBP74.6 million in the third quarter, with North America contributing revenue of GBP49.6 million, Rentokil said.

The London-listed company said revenue rose 4.3% to GBP758.1 million at actual exchange rates, or 8.5% at constant exchange rates, adding that its dividend guidance remains in place given its performance for the period. It will announce a dividend payment in relation to 2020 in February 2021.

"We have consistently delivered year-on-year revenue growth each month since the declines in April and May during the peak of the crisis. This performance has been achieved through a combination of a return to more regular levels of service provision across our categories, continued high demand for one-time disinfection services and the benefit of acquisitions made in 2019," Chief Executive Andy Ransom said.

Write to Sabela Ojea at sabela.ojea@wsj.com; @sabelaojeaguix

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