Final
Results dated 07 March 2024
|
|
Financial Results1
|
AER
|
|
CER
|
||||
£m
|
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
|
|
Revenue
|
5,375
|
3,714
|
44.7%
|
|
5,414
|
3,714
|
45.8%
|
Adjusted EBITDA
|
1,228
|
859
|
43.0%
|
|
|
|
|
Adjusted Operating Profit
|
898
|
571
|
57.1%
|
|
897
|
571
|
57.0%
|
Adjusted Profit before Tax
|
766
|
532
|
43.8%
|
|
801
|
532
|
50.5%
|
Free Cash Flow
|
500
|
374
|
33.7%
|
|
|
|
|
Diluted Adjusted EPS
|
23.08p
|
21.22p
|
8.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Statutory Results
|
|
|
|
|
|
|
|
Revenue
|
5,375
|
3,714
|
44.7%
|
|
|
|
|
Operating Profit
|
625
|
317
|
96.9%
|
|
|
|
|
Profit before Tax
|
493
|
296
|
66.9%
|
|
|
|
|
EPS
|
15.14p
|
11.57p
|
30.8%
|
|
|
|
|
Dividend Per Share
|
8.68p
|
7.55p
|
15.0%
|
|
|
|
|
●
|
Group Revenue up 45.8% and Statutory Revenue up 44.7%. Organic
Revenue growth of 4.9%, supported
by strong performances in Europe, Asia, Pacific, UK and
LATAM
|
|
|
-
|
North America Organic Revenue growth of 3.1% with growth of 3.5% in
Pest Control services owing to lower new business lead
generation
|
|
-
|
Good Organic Revenue growth across all business categories: 4.5% in
Pest Control; 4.8% in Hygiene and Wellbeing; and 13.2% in France
Workwear
|
●
|
Adjusted Operating Profit up 57.0% and Statutory Operating Profit
up 96.9%. Group Adjusted Operating Margin up 120bps to
16.6%2
|
|
|
-
|
Full year margin expansion in Pest Control and France Workwear,
with Hygiene & Wellbeing margin in H2 above 19.0%, as
expected
|
|
-
|
North America Adjusted Operating Margin up 160bps to
18.7%
|
|
-
|
Sustained strong price progression across all regions, accompanied
by good customer retention
|
●
|
Diluted Adjusted EPS up 8.8% to 23.08p. EPS up 30.8% to 15.14p.
Diluted Adjusted EPS at CER up 12.9%
|
|
●
|
Free Cash Flow of £500m representing 89.4% Adjusted Free Cash
Flow conversion
|
|
●
|
Net debt to EBITDA reduced to 2.8x at 31 December 2023, one year
ahead of target
|
|
●
|
Recommended final dividend of 5.93p for total FY 23 dividend of
8.68p per share, an increase of 15.0%, in line with our progressive
dividend policy
|
●
|
RIGHT WAY 2 plan launched to reinvigorate organic growth in North
America
|
|
|
-
|
Action plan devised and underway following an in-depth regional
performance review. Increased Terminix synergies enables plan to be
accompanied by additional c.$25m of investment in sales and
marketing
|
●
|
Terminix gross synergy target increased by $50m with integration
completion revised to 2026
|
|
|
-
|
$69m pre-tax net cost synergies achieved in FY 23, ahead of
guidance ($60m). Expected to deliver a further c.$40m of net cost
synergies in FY 24
|
|
-
|
Total gross and net synergy targets raised to c.$325m and c.$225m
respectively (previously $275m and $200m). Integration completion
revised to 2026 to de-risk branch integrations and deliver the
upgraded synergy targets
|
●
|
Continued momentum in value-creating M&A programme
|
|
|
-
|
41 acquisitions completed in 2023 with annualised revenues of
c.£106m
|
Investors / Analysts:
|
Peter Russell
|
Rentokil Initial plc
|
+44 (0)7795 166506
|
Media:
|
Malcolm Padley
|
Rentokil Initial plc
|
+44 (0)7788 978199
|
|
Revenue
|
|
Adjusted Operating Profit
|
||||
|
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
|
|
North America
|
3,314
|
1,849
|
79.2%
|
|
618
|
315
|
95.9%
|
Pest
Control
|
3,208
|
1,746
|
83.7%
|
|
599
|
297
|
101.8%
|
Hygiene
& Wellbeing
|
106
|
103
|
2.5%
|
|
19
|
18
|
0.7%
|
|
|
|
|
|
|
|
|
Europe (incl. LATAM)
|
1078
|
941
|
14.6%
|
|
210
|
187
|
12.5%
|
Pest
Control
|
520
|
427
|
21.8%
|
|
120
|
103
|
16.6%
|
Hygiene
& Wellbeing
|
341
|
322
|
5.8%
|
|
52
|
53
|
(1.8%)
|
France
Workwear
|
217
|
192
|
13.2%
|
|
38
|
31
|
23.6%
|
|
|
|
|
|
|
|
|
UK & Sub Saharan Africa
|
394
|
365
|
7.9%
|
|
95
|
95
|
(0.5%)
|
Pest
Control
|
197
|
182
|
8.0%
|
|
51
|
47
|
8.0%
|
Hygiene
& Wellbeing
|
197
|
183
|
7.7%
|
|
44
|
48
|
(8.9%)
|
|
|
|
|
|
|
|
|
Asia & MENAT
|
357
|
321
|
11.2%
|
|
47
|
45
|
4.0%
|
Pest
Control
|
266
|
231
|
15.0%
|
|
35
|
34
|
4.5%
|
Hygiene
& Wellbeing
|
91
|
90
|
1.5%
|
|
12
|
11
|
2.6%
|
|
|
|
|
|
|
|
|
Pacific
|
261
|
227
|
15.0%
|
|
57
|
48
|
19.8%
|
Pest
Control
|
130
|
104
|
25.2%
|
|
23
|
16
|
44.5%
|
Hygiene
& Wellbeing
|
131
|
123
|
6.4%
|
|
34
|
32
|
7.6%
|
|
|
|
|
|
|
|
|
Central
|
10
|
11
|
(4.4%)
|
|
(121)
|
(107)
|
(12.7%)
|
Restructuring costs
|
|
|
|
|
(9)
|
(12)
|
20.6%
|
Total at CER
|
5,414
|
3,714
|
45.8%
|
|
897
|
571
|
57.0%
|
Total at AER
|
5,375
|
3,714
|
44.7%
|
|
898
|
571
|
57.1%
|
|
Revenue
|
|
Adjusted Operating Profit
|
||||
|
2023£m
|
2022£m
|
Change%
|
2023£m
|
2022£m
|
Change%
|
|
Pest Control
|
4,321
|
2,690
|
60.6%
|
|
828
|
497
|
66.7%
|
Hygiene & Wellbeing
|
866
|
821
|
5.4%
|
|
161
|
162
|
(1.5%)
|
France Workwear
|
217
|
192
|
13.2%
|
|
38
|
31
|
23.6%
|
Central
|
10
|
11
|
(4.4%)
|
|
(121)
|
(107)
|
(12.7%)
|
Restructuring costs
|
|
|
|
|
(9)
|
(12)
|
20.6%
|
Total at CER
|
5,414
|
3,714
|
45.8%
|
|
897
|
571
|
57.0%
|
Total at AER
|
5,375
|
3,714
|
44.7%
|
|
898
|
571
|
57.1%
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
3,306
|
78.7%
|
3,314
|
79.2%
|
3.1%
|
3.0%
|
Operating Profit
|
489
|
158.4%
|
490
|
159.0%
|
|
|
Adjusted Operating Profit
|
617
|
95.5%
|
618
|
95.9%
|
|
|
Adjusted Operating Margin
|
18.7%
|
1.6%
|
18.7%
|
1.6%
|
|
|
●
|
Driving further improvement in frontline colleague retention and
productivity, in particular in Sales to improve sales
conversion. Our
Employer of Choice programme will focus on enhanced talent
acquisition and onboarding, additional investment in training, and
seasonal sales incentive programmes.
|
●
|
Investing in a brand strategy to reinforce
awareness. This
includes additional investment in the Terminix brand to build on
its industry-leading awareness (#1 best known brand in US Pest
Control according to a 2023 Google Brand Arc Study) and build
preference with our target segments. We'll also continue to build
the equity of the Rentokil brand to support business growth in the
National and Strategic accounts space.
|
●
|
Adding capabilities and resources in marketing to refine our focus
and build our marketing excellence. In
addition to the new regional marketing and sales leadership, the
North America business will benefit from increased investment for
growth of c.$25m towards people, sales leads, digital channels, and
other brand and marketing activities. New marketing agency
partnerships are now in place and our first multi-channel brand
marketing campaign will be launched this
Spring.
|
●
|
Strengthening sales effectiveness to target increased sales
colleague retention, particularly in the 0-12 months service
category. Over time we will introduce new data, tools and
technologies in order to improve timing from sales lead to
inspection and quote.
|
●
|
Enhancing our approach to pricing discipline to continue to offset
inflation. Sales and marketing initiatives will be accompanied by
continued strong pricing discipline for both new and existing
customers. Our pricing practices will be enhanced with third-party
tools and data to deliver market and segment-specific value to
customers. This includes the viability testing of new AI-backed
capabilities. We will also optimise bundling, promotions and
discounting programmes through consistent market-level pricing
tests.
|
●
|
Improving customer satisfaction and retention to take it to par
with the average elsewhere in the Group over time. We are dedicated
to delivering a consistently positive customer experience including
through investment in our digital platforms, in technician training
and in our contract renewal processes.
|
●
|
Increasing technician sales leads to expand revenue from existing
customers. Through execution of the Trusted Advisor Programme,
we're focused on driving up the volume, value, and conversion rate
of technician leads towards the UK benchmark over time. In 2024 the
Trusted Advisor programme will be rolled out to Rentokil
technicians.
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
1,081
|
14.9%
|
1,078
|
14.6%
|
9.2%
|
8.3%
|
Operating Profit
|
182
|
15.6%
|
161
|
2.2%
|
|
|
Adjusted Operating Profit
|
215
|
14.9%
|
210
|
12.5%
|
|
|
Adjusted Operating Margin
|
19.9%
|
0.0%
|
19.5%
|
-0.4%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
390
|
6.6%
|
394
|
7.9%
|
3.5%
|
3.4%
|
Operating Profit
|
84
|
-6.6%
|
85
|
-5.5%
|
|
|
Adjusted Operating Profit
|
94
|
-1.7%
|
95
|
-0.5%
|
|
|
Adjusted Operating Margin
|
24.1%
|
-2.0%
|
24.1%
|
-2.0%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
339
|
5.6%
|
357
|
11.2%
|
10.2%
|
7.1%
|
Operating Profit
|
33
|
40.3%
|
34
|
44.4%
|
|
|
Adjusted Operating Profit
|
45
|
0.3%
|
47
|
4.0%
|
|
|
Adjusted Operating Margin
|
13.3%
|
-0.8%
|
13.1%
|
-1.0%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
249
|
10.0%
|
261
|
15.0%
|
6.8%
|
6.8%
|
Operating Profit
|
47
|
19.5%
|
49
|
24.9%
|
|
|
Adjusted Operating Profit
|
55
|
14.6%
|
57
|
19.8%
|
|
|
Adjusted Operating Margin
|
21.7%
|
0.9%
|
21.7%
|
0.9%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
4,286
|
59.2%
|
4,321
|
60.6%
|
4.5%
|
4.5%
|
Operating Profit
|
649
|
107.5%
|
632
|
102.1%
|
|
|
Adjusted Operating Profit
|
830
|
66.5%
|
828
|
66.7%
|
|
|
Adjusted Operating Margin
|
19.3%
|
0.8%
|
19.2%
|
0.7%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
858
|
4.6%
|
866
|
5.4%
|
4.8%
|
2.4%
|
Disinfection
|
2.44
|
-88.1%
|
2.48
|
-87.9%
|
|
|
Operating Profit
|
149
|
-4.9%
|
151
|
-3.8%
|
|
|
Adjusted Operating Profit
|
157
|
-2.6%
|
161
|
-1.5%
|
|
|
Adjusted Operating Margin
|
18.4%
|
-1.4%
|
18.5%
|
-1.3%
|
|
|
|
2023AER£m
|
AERGrowth
|
2023CER£m
|
CERGrowth
|
OrganicGrowth exclDisinfection
|
OrganicGrowth inclDisinfection
|
Revenue
|
221
|
15.3%
|
217
|
13.2%
|
13.2%
|
13.2%
|
Operating Profit
|
37
|
23.9%
|
37
|
21.6%
|
|
|
Adjusted Operating Profit
|
39
|
25.9%
|
38
|
23.6%
|
|
|
Adjusted Operating Margin
|
17.5%
|
1.5%
|
17.5%
|
1.5%
|
|
|
●
|
Migration onto the Workday HR Information System
(HRIS): 10,500 colleagues
from the legacy Rentokil North America business have been
transitioned from UKG to the Workday platform, completed in
September 2023. This change to a single HR platform for reporting
is crucial to aligning numerous business processes, including time
tracking, payroll and performance management, and to enabling
downstream initiatives, such as pay plan harmonisation and branch
integrations.
|
●
|
Benefits Harmonisation: Following an in-depth review, we adopted
best practices from across the combined organisation to update
company policies, procedures and offerings. All activities were
completed allowing for a singular Open Enrollment experience for
our colleagues in November. A harmonised benefit platform is
critical to the reduction of administrative complexity and
ultimately colleague engagement. It ensures consistent application
of benefit access and cost to all colleagues, increases
efficiencies, and provides a single platform of
communication.
|
●
|
Preparation for Harmonisation of Technician, Sales and Field
Management Pay Plans: Both
legacy organisations have had numerous different compensation plans
for front-line and field management roles. Harmonisation for
approximately 11,000 front-line colleagues, 2,500 sales colleagues
and 550 field management roles are set to provide market
competitive base salary and performance-based commission directly
aligned to our strategic objectives. New positions have been
defined in each area based on skills, experience, certifications
and licenses, with corresponding fixed base salary and incentive
levels. Pay plan design, which entailed impact analysis to mitigate
colleague retention, has been largely completed. Implementation
will take place in 2024 in a staged approach across regional
markets.
|
●
|
Customer Content Management (CCM) and Self-service
Portal. These two
transformational tools are now live in North America, delivering
business benefits and improving the customer experience. The new
residential portal, deployed already to 18 brands in the region,
meets customer demand for a 24/7 personalised experience that
includes bill payment, appointment scheduling and service
recommendations. The portal also frees up valuable call agent time
to handle more complex, high value interactions. Alongside this we
have launched a refreshed CCM tool that better empowers our call
agents with detailed customer tracking, a 360 view of the customer
and guided workflows for consistency and best practice. The new CCM
tool has delivered improvements in customer query resolution and
new colleague training.
|
●
|
Enhanced Field Sales Tools. Valuable new features have been integrated
to our 'Winning Formula' residential sales app, which is also being
made available for the first time to our Terminix colleagues. The
app follows the sales process end to end, from site inspection
through to proposal and first appointment scheduling. Additionally,
we've integrated the 'Trusted Advisor' process within our
ServiceTrak app, further supporting service technicians to generate
sales leads and upsell opportunities. This reflects a strategic
focus on closer alignment between sales and service teams, enabled
by technology.
|
●
|
Big Data Platform. The
development of a data command centre brings the benefits of fast
time access to big data and insights from multiple sources. It will
allow for Terminix data to be integrated and increasingly provide
actionable analytics from across our entire branch network. We also
see exciting AI opportunities with predictive
capabilities.
|
●
|
A legal entity merger, critical to enabling branch integrations and
unified contracts
|
●
|
Roll out of more than 100 IT system features leading up to the
commencement of system migration
|
●
|
Migration to a single Procurement platform
|
●
|
Consolidation onto a unified Finance system, including
consolidation to a single expenses and travel management system,
followed by purchase card harmonisation
|
●
|
Migration of Terminix National Accounts to Rentokil's single
customer management and billing platform
|
●
|
Combination of all heritage customer care agents onto a single
unified communications platform
|
●
|
Completion and sign off on data migration and IT system
architecture configuration
|
|
2022
|
2023
|
2024
|
2025
|
2026
|
Cumulative
|
Selling, General and Admin Synergies
|
$15m
|
$73m
|
$77m
|
$20m
|
-
|
$185m
|
Field Ops
|
-
|
$16m
|
$29m
|
$55m
|
$40m
|
$140m
|
Gross Synergies
|
$15m
|
$89m
|
$106m
|
$75m
|
$40m
|
$325m
|
Investments
|
$(2)m
|
$(20)m
|
$(66)m
|
$(10)m
|
$(2)m
|
$(100)m
|
Net Synergies
|
$13m
|
$69m
|
$40m
|
$65m
|
$38m
|
$225m
|
|
|
|
|
|
|
|
CTA Cash
|
$40m
|
$92m
|
$85m
|
$28m
|
£5m
|
$250m
|
£m at actual exchange rates
|
Year to Date
|
||
2023 FY
£m
|
2022 FY
£m
|
Change
£m
|
|
Adjusted Operating Profit
|
898
|
571
|
327
|
Depreciation
|
300
|
276
|
24
|
Other
|
30
|
12
|
18
|
Adjusted EBITDA
|
1,228
|
859
|
369
|
One-off and adjusting items (non-cash)
|
(11)
|
(77)
|
66
|
Working capital**
|
(47)
|
9
|
(56)
|
Movement on provisions
|
(56)
|
(12)
|
(44)
|
Capex - additions
|
(211)
|
(190)
|
(21)
|
Capex - disposals
|
14
|
5
|
9
|
Capital of lease payments and initial direct costs
incurred
|
(151)
|
(104)
|
(47)
|
Interest
|
(166)
|
(39)
|
(127)
|
Tax
|
(100)
|
(77)
|
(23)
|
Free Cash Flow
|
500
|
374
|
126
|
Acquisitions
|
(242)
|
(1,018)
|
776
|
Disposal of companies and businesses
|
19
|
1
|
18
|
Dividends
|
(201)
|
(122)
|
(79)
|
Cost of issuing new shares
|
-
|
(16)
|
16
|
Cash impact of one-off and adjusting items
|
(107)
|
(59)
|
(48)
|
Other
|
(6)
|
-
|
(6)
|
Debt related cash flows
|
|
|
|
Cash outflow on settlement of debt related foreign exchange forward
contracts
|
(3)
|
26
|
(29)
|
Net investment in term deposits
|
-
|
1
|
(1)
|
Proceeds from new debt
|
-
|
2,383
|
(2,383)
|
Debt repayments
|
-
|
(844)
|
844
|
Debt related cash flows
|
(3)
|
1,566
|
(1,569)
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
(40)
|
726
|
(766)
|
Cash and cash equivalents at the beginning of the year
|
879
|
242
|
637
|
Exchange losses on cash and cash equivalents
|
(7)
|
(89)
|
82
|
Cash and cash equivalents at end of the financial year
|
832
|
879
|
(47)
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
(40)
|
726
|
(766)
|
Debt related cash flows
|
3
|
(1,566)
|
1,569
|
IFRS 16 liability movement
|
3
|
(34)
|
37
|
Debt acquired
|
(1)
|
(946)
|
945
|
Bond interest accrual
|
(1)
|
(42)
|
41
|
Foreign exchange translation and other items
|
169
|
(132)
|
301
|
Increase in net debt
|
133
|
(1,994)
|
2,127
|
Opening net debt
|
(3,279)
|
(1,285)
|
(1,994)
|
Closing net debt
|
(3,146)
|
(3,279)
|
133
|
●
|
Restructuring costs: £5m; and One offs and Adjusting items
excl. Terminix: c.£10m
|
●
|
Terminix integration Costs to Achieve*: c.$90m-$100m
|
●
|
Central and regional overheads, including Terminix related
investments. £145m-£150m
|
●
|
P&L adjusted interest costs: c.£135m-£145m**, incl.
£10m-£15m of hyperinflation (at AER)
|
●
|
Estimated Adjusted Effective Tax Rate: 25%-26%
|
●
|
Share of Profits from Associates: c.£8m-£10m
|
●
|
Impact of FX within range of -£25m to
-£35m***
|
●
|
Intangibles amortisation: £175m-£185m
|
●
|
Due to closure of the Paragon distribution business, North America
regional Revenue and Adjusted Operating Profit in 2024 will be
reduced by approximately $61m and $4m respectively.
|
●
|
Overall one-off and adjusting items:
c.£85m-£95m
|
●
|
Working Capital: c.£50m-£60m and c.£55m-£65m of
provision payments
|
●
|
Capex excluding right of use (ROU) asset lease payments:
£250m-£260m
|
●
|
Cash interest: c.£160m-£170m
|
●
|
Cash tax payments: £115m-£125m
|
●
|
Anticipated spend on M&A in 2024 of c.£250m
|
|
Amount
|
Rate
|
Fixed/Floating
|
2023AER£m
|
|
2024AER£m
|
Bonds and swaps
|
|
|
|
|
|
|
EUR
|
400
|
0.95%
|
Fixed
|
-
|
|
-
|
EUR
|
500
|
0.88%
|
Fixed
|
-
|
|
-
|
EUR
|
600
|
0.50%
|
Fixed
|
-
|
|
-
|
EUR
|
850
|
3.88%
|
Fixed
|
15
|
|
15
|
EUR
|
600
|
4.38%
|
Fixed
|
23
|
|
23
|
GBP
|
400
|
5.00%
|
Fixed
|
20
|
|
20
|
Amortised Cost
|
|
|
Fixed
|
4
|
|
3
|
Swaps
|
|
3.53% (avg)
|
Fixed
|
42
|
|
40
|
Total
|
1,850
|
|
|
104
|
|
101
|
Term Loan
|
|
|
|
|
|
|
USD
|
700
|
5%-6%
|
Float
|
31
|
|
23
|
|
|
|
|
|
|
|
Lease Interest
|
|
|
Float
|
25
|
|
26
|
Other Interest
|
|
|
Float
|
18
|
|
23
|
Total Other
|
|
|
|
43
|
|
49
|
|
|
|
|
|
|
|
Finance Cost2
|
|
|
|
178
|
|
173
|
|
|
|
|
|
|
|
Interest received
|
|
|
|
(26)
|
|
(20)
|
Hyperinflation
|
|
|
|
(11)
|
|
(13)
|
Finance Income3
|
|
|
|
(37)
|
|
(33)
|
|
|
|
|
|
|
|
Adjusted Interest
|
|
|
|
141
|
|
140
|
Adjusting items
|
|
|
|
|
|
|
Amortisation of discount on legacy
provisions2
Gain on hedge accounting recognised in finance
income/cost3
|
11
(11)
|
|
10
-
|
|
North
America
£m
|
Europe
(incl. LATAM)
£m
|
UK & Sub-Saharan
Africa
£m
|
Asia &
MENAT
£m
|
Pacific£m
|
Central and regional£m
|
Total£m
|
2022 Revenue
|
1,849
|
941
|
365
|
321
|
227
|
11
|
3,714
|
Adjustment for Terminix pre-acquisition 2022
Revenue1
|
1,311
|
23
|
-
|
-
|
-
|
-
|
1,334
|
Normalised 2022 Revenue (base for Organic Revenue Growth
percentage)
|
3,160
|
964
|
365
|
321
|
227
|
11
|
5,048
|
Revenue from 2023 acquisitions(at 2022 CER)2
|
33
|
7
|
15
|
6
|
14
|
-
|
75
|
Revenue from 2022 acquisitions(at 2022 CER)3
|
24
|
27
|
1
|
7
|
4
|
-
|
63
|
Organic Revenue Growth 2023(at 2022 CER)4
|
97
|
80
|
13
|
23
|
16
|
(1)
|
228
|
Exchange differences
|
(8)
|
3
|
(4)
|
(18)
|
(12)
|
-
|
(39)
|
2023 Revenue (at AER)
|
3,306
|
1,081
|
390
|
339
|
249
|
10
|
5,375
|
Organic Revenue Growth %
|
3.0%
|
8.3%
|
3.4%
|
7.1%
|
6.8%
|
(4.4)%
|
4.5%
|
Year-over-year change in disinfection revenue
|
(1)
|
(8)
|
-
|
(9)
|
-
|
-
|
(18)
|
Organic Revenue Growth excluding disinfection %
|
3.1%
|
9.2%
|
3.5%
|
10.2%
|
6.8%
|
(4.4)%
|
4.9%
|
|
North
America
£m
|
Europe
(incl. LATAM)
£m
|
UK & Sub-Saharan
Africa
£m
|
Asia &
MENAT
£m
|
Pacific£m
|
Central and regional£m
|
Total£m
|
2021 Revenue
|
1,291
|
832
|
354
|
271
|
197
|
12
|
2,957
|
Adjustment for Terminix pre-acquisition 2021
Revenue1
|
1,412
|
33
|
-
|
-
|
-
|
-
|
1,445
|
Normalised 2021 Revenue (base for Organic Revenue Growth
percentage)
|
2,703
|
865
|
354
|
271
|
197
|
12
|
4,402
|
Revenue from 2022 acquisitions (excluding Terminix) (at 2021
CER)2
|
15
|
38
|
-
|
6
|
7
|
-
|
66
|
Revenue from 2021 acquisitions(at 2021 CER)3
|
48
|
11
|
-
|
12
|
4
|
-
|
75
|
Organic Revenue Growth 2022(at 2021 CER)4
|
89
|
55
|
11
|
19
|
13
|
(1)
|
186
|
Exchange differences
|
305
|
(5)
|
-
|
13
|
6
|
-
|
319
|
Remove Terminix pre-acquisition 2022 Revenue (at
AER)5
|
(1,311)
|
(23)
|
-
|
-
|
-
|
-
|
(1,334)
|
2022 Revenue (at AER)
|
1,849
|
941
|
365
|
321
|
227
|
11
|
3,714
|
Organic Revenue Growth %
|
3.2%
|
6.3%
|
3.1%
|
6.8%
|
7.5%
|
(11.9)%
|
4.2%
|
Year-over-year change in disinfection revenue
|
(61)
|
(21)
|
(6)
|
(7)
|
(1)
|
-
|
(96)
|
Organic Revenue Growth excluding disinfection %
|
5.7%
|
9.1%
|
4.9%
|
11.0%
|
7.9%
|
(11.9)%
|
6.6%
|
●
|
amortisation and impairment of intangible assets (excluding
computer software);
|
●
|
one-off and adjusting items; and
|
●
|
net interest adjustments.
|
|
One-off and adjusting items
cost/(income)
£m
|
One-off and adjusting items
tax impact
£m
|
One-off and adjusting items
cash inflow/(outflow)£m
|
2021
|
|
|
|
Acquisition and integration costs
|
13
|
(1)
|
(12)
|
Terminix acquisition costs
|
6
|
-
|
(6)
|
Other
|
2
|
(1)
|
(9)
|
Total
|
21
|
(2)
|
(27)
|
2022
|
|
|
|
Acquisition and integration costs
|
5
|
(2)
|
(13)
|
Fees relating to Terminix acquisition
|
68
|
(4)
|
(38)
|
Terminix integration costs
|
62
|
(14)
|
(32)
|
UK pension scheme - return of surplus
|
-
|
-
|
22
|
Other
|
1
|
-
|
2
|
Total
|
136
|
(20)
|
(59)
|
2023
|
|
|
|
Acquisition and integration costs
|
13
|
(2)
|
(13)
|
Fees relating to Terminix acquisition
|
1
|
-
|
(25)
|
Terminix integration costs
|
81
|
(21)
|
(74)
|
Other
|
3
|
(1)
|
5
|
Total
|
98
|
(24)
|
(107)
|
|
2023AER£m
|
2022AER£m
|
Finance cost
|
189
|
79
|
Finance income
|
(48)
|
(49)
|
Add back:
|
|
|
Amortisation of discount on legacy provisions
|
(11)
|
(3)
|
Foreign exchange and hedge accounting ineffectiveness
|
11
|
21
|
Adjusted Interest
|
141
|
48
|
|
2023£m
|
2022£m
|
Operating profit
|
625
|
317
|
Add back:
|
|
|
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangible assets1
|
175
|
118
|
Adjusted Operating Profit (at AER)
|
898
|
571
|
Effect of foreign exchange
|
(1)
|
-
|
Adjusted Operating Profit (at CER)
|
897
|
571
|
|
2023
|
|||||
|
IFRS measures
£m
|
Net interest adjustments £m
|
One-off and adjusting items
£m
|
Amortisation and impairment of
intangibles1
£m
|
Non-IFRS measures
£m
|
|
Profit before income tax
|
493
|
-
|
98
|
175
|
766
|
Adjusted Profit Before Tax
|
Income tax expense
|
(112)
|
(2)
|
(24)
|
(44)
|
(182)
|
Tax on Adjusted Profit
|
Profit for the year
|
381
|
(2)
|
74
|
131
|
584
|
Adjusted ProfitAfter Tax
|
|
2022
|
|||||
|
IFRS measures
£m
|
Net interest adjustments £m
|
One-off and adjusting items
£m
|
Amortisation and impairment ofintangibles1
£m
|
Non-IFRS measures
£m
|
|
Profit beforeincome tax
|
296
|
(18)
|
136
|
118
|
532
|
Adjusted ProfitBefore Tax
|
Income tax expense
|
(64)
|
3
|
(20)
|
(24)
|
(105)
|
Tax on Adjusted Profit
|
Profit for the year
|
232
|
(15)
|
116
|
94
|
427
|
Adjusted ProfitAfter Tax
|
|
2023£m
|
2022£m
|
Profit for the year
|
381
|
232
|
Add back:
|
|
|
Finance income
|
(48)
|
(49)
|
Finance cost
|
189
|
79
|
Share of profit from associates net of tax
|
(9)
|
(9)
|
Income tax expense
|
112
|
64
|
Depreciation
|
300
|
276
|
Other non-cash expenses
|
30
|
12
|
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangible assets1
|
175
|
118
|
Adjusted EBITDA
|
1,228
|
859
|
|
2023£m
|
2022£m
|
Profit attributable to equity holders of the Company
|
381
|
232
|
Add back:
|
|
|
Net interest adjustments
|
-
|
(18)
|
One-off and adjusting items
|
98
|
136
|
Amortisation and impairment of intangibles1
|
175
|
118
|
Tax on above items2
|
(70)
|
(41)
|
Adjusted profit attributable to equity holders of the
Company
|
584
|
427
|
|
|
|
Weighted average number of ordinary shares in issue
(million)
|
2,516
|
2,002
|
Adjustment for potentially dilutive shares (million)
|
11
|
12
|
Weighted average number of ordinary shares for diluted earnings per
share (million)
|
2,527
|
2,014
|
|
|
|
Basic Adjusted Earnings Per Share
|
23.19p
|
21.34p
|
Diluted Adjusted Earnings Per Share
|
23.08p
|
21.22p
|
|
2023£m
|
2022£m
|
Net cash flows from operating activities
|
737
|
600
|
Purchase of property, plant, and equipment
|
(167)
|
(153)
|
Purchase of intangible assets
|
(44)
|
(37)
|
Capital element of lease payments and initial direct costs
incurred
|
(151)
|
(104)
|
Proceeds from sale of property, plant and equipment, and
software
|
14
|
5
|
Cash impact of one-off and adjusting items
|
107
|
59
|
Dividends received from associates
|
4
|
4
|
Free Cash Flow
|
500
|
374
|
|
2023£m
|
2022£m
|
Free Cash Flow
|
500
|
374
|
Product development additions
|
10
|
10
|
Net investment hedge cash interest through Other Comprehensive
Income
|
12
|
8
|
Adjusted Free Cash Flow (a)
|
522
|
392
|
Adjusted Profit After Tax (b)
|
584
|
427
|
Adjusted Free Cash Flow Conversion (a/b)
|
89.4%
|
91.8%
|
|
2023£m
|
2022£m
|
Net cash flows from operating activities (a)
|
737
|
600
|
Profit attributable to equity holders of the Company
(b)
|
381
|
232
|
Cash Conversion (a/b)
|
193.4%
|
258.6%
|
|
2023£m
|
2022£m
|
Income tax expense
|
112
|
64
|
Tax adjustments on:
|
|
|
Amortisation and impairment of intangible assets1
|
44
|
24
|
Net interest adjustments
|
2
|
(3)
|
One-off and adjusting items
|
24
|
20
|
Adjusted Income Tax Expense (a)
|
182
|
105
|
Adjusted Profit Before Tax (b)
|
766
|
532
|
Adjusted Effective Tax Rate (a/b)
|
23.8%
|
19.7%
|
|
Note
|
2023
£m
|
2022
£m
|
2021
£m
|
Revenue
|
2
|
5,375
|
3,714
|
2,957
|
Operating expenses
|
|
(4,711)
|
(3,373)
|
(2,610)
|
Net impairment losses on financial assets
|
|
(39)
|
(24)
|
-
|
Operating profit
|
|
625
|
317
|
347
|
Finance income
|
4
|
48
|
49
|
4
|
Finance cost
|
3
|
(189)
|
(79)
|
(34)
|
Share of profit from associates net of tax
|
|
9
|
9
|
8
|
Profit before income tax
|
|
493
|
296
|
325
|
Income tax expense1
|
5
|
(112)
|
(64)
|
(62)
|
Profit for the year
|
|
381
|
232
|
263
|
Profit for the year attributable to:
|
|
|
|
|
Equity holders of the Company
|
|
381
|
232
|
263
|
Non-controlling interests
|
|
-
|
-
|
-
|
Other comprehensive income:
|
|
|
|
|
Items that are not reclassified subsequently to the income
statement:
|
|
|
|
|
Remeasurement of net defined benefit liability
|
|
-
|
2
|
1
|
|
|
|
|
|
Items that may be reclassified subsequently to the income
statement:
|
|
|
|
|
Net exchange adjustments offset in reserves
|
|
(352)
|
(232)
|
(18)
|
Net gain/(loss) on net investment hedge
|
|
109
|
(68)
|
15
|
Cost of hedging
|
|
9
|
(2)
|
(1)
|
Effective portion of changes in fair value of cash flow
hedge
|
|
3
|
(6)
|
13
|
Tax related to items taken to other comprehensive
income
|
|
6
|
11
|
2
|
Other comprehensive income for the year
|
|
(225)
|
(295)
|
12
|
Total comprehensive income for the year
|
|
156
|
(63)
|
275
|
Total comprehensive income for the year attributable
to:
|
|
|
|
|
Equity holders of the Company
|
|
156
|
(63)
|
275
|
Non-controlling interests
|
|
-
|
-
|
-
|
|
|
|
|
|
Earnings per share attributable to the Company's equity
holders:
|
|
|
|
|
Basic
|
6
|
15.14p
|
11.57p
|
14.16p
|
Diluted
|
6
|
15.07p
|
11.51p
|
14.10p
|
|
Note
|
2023
£m
|
Retrospectively
adjusted
20221
£m
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Intangible assets1
|
9
|
7,042
|
7,303
|
Property, plant and equipment
|
10
|
499
|
495
|
Right-of-use assets1
|
|
452
|
449
|
Investments in associated undertakings1
|
|
44
|
63
|
Other investments
|
|
21
|
23
|
Deferred tax assets
|
|
43
|
43
|
Contract costs1
|
|
224
|
215
|
Retirement benefit assets
|
|
3
|
3
|
Trade and other receivables
|
|
45
|
90
|
Derivative financial instruments
|
|
57
|
21
|
|
|
8,430
|
8,705
|
Current assets
|
|
|
|
Other investments
|
|
1
|
1
|
Inventories
|
|
207
|
200
|
Trade and other receivables1
|
|
880
|
830
|
Current tax assets
|
|
33
|
36
|
Derivative financial instruments
|
|
14
|
-
|
Cash and cash equivalents
|
11
|
1,562
|
2,170
|
|
|
2,697
|
3,237
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Trade and other payables1
|
|
(1,144)
|
(1,166)
|
Current tax liabilities
|
|
(48)
|
(60)
|
Provisions for liabilities and charges
|
17
|
(94)
|
(133)
|
Bank and other short-term borrowings1
|
|
(1,134)
|
(1,345)
|
Lease liabilities
|
|
(127)
|
(135)
|
Derivative financial instruments
|
|
(32)
|
-
|
|
|
(2,579)
|
(2,839)
|
Net current assets
|
|
118
|
398
|
Non-current liabilities
|
|
|
|
Other payables1
|
|
(71)
|
(90)
|
Bank and other long-term borrowings
|
|
(3,153)
|
(3,574)
|
Lease liabilities1
|
|
(318)
|
(325)
|
Deferred tax liabilities1
|
|
(517)
|
(513)
|
Retirement benefit obligations
|
16
|
(28)
|
(30)
|
Provisions for liabilities and charges1
|
17
|
(357)
|
(381)
|
Derivative financial instruments
|
|
(16)
|
(92)
|
|
|
(4,460)
|
(5,005)
|
Net assets
|
|
4,088
|
4,098
|
Equity
|
|
|
|
Capital and reserves attributable to the Company's equity
holders
|
|
|
|
Share capital
|
18
|
25
|
25
|
Share premium
|
|
14
|
9
|
Other reserves
|
|
532
|
763
|
Retained earnings
|
|
3,518
|
3,302
|
|
|
4,089
|
4,099
|
Non-controlling interests
|
|
(1)
|
(1)
|
Total equity
|
|
4,088
|
4,098
|
|
Attributable to equity holders of the Company
|
|
|
|||
|
Share
capital
£m
|
Share
premium
£m
|
Other
reserves
£m
|
Retained
earnings
£m
|
Non-
controlling
interests
£m
|
Total
equity
£m
|
At 1 January 2021
|
18
|
7
|
(1,926)
|
3,031
|
1
|
1,131
|
Profit for the year
|
-
|
-
|
-
|
263
|
-
|
263
|
Other comprehensive income:
|
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
(18)
|
-
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
15
|
-
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
13
|
-
|
-
|
13
|
Cost of hedging
|
-
|
-
|
(1)
|
-
|
-
|
(1)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
1
|
-
|
1
|
Transfer between reserves
|
-
|
-
|
(10)
|
10
|
-
|
-
|
Tax related to items taken directly to other comprehensive
income
|
-
|
-
|
-
|
2
|
-
|
2
|
Total comprehensive income for the year
|
-
|
-
|
(1)
|
276
|
-
|
275
|
Transactions with owners:
|
|
|
|
|
|
|
Shares issued in the year
|
1
|
-
|
-
|
(1)
|
-
|
-
|
Acquisition of non-controlling interests
|
-
|
-
|
-
|
(8)
|
(2)
|
(10)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(139)
|
-
|
(139)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
10
|
-
|
10
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
5
|
-
|
5
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(8)
|
-
|
(8)
|
At 31 December 2021
|
19
|
7
|
(1,927)
|
3,166
|
(1)
|
1,264
|
Profit for the year
|
-
|
-
|
-
|
232
|
-
|
232
|
Other comprehensive income:
|
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
(232)
|
-
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
(68)
|
-
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
(2)
|
-
|
-
|
(2)
|
Remeasurement of net defined benefit liability
|
-
|
-
|
-
|
2
|
-
|
2
|
Tax related to items taken directly to other comprehensive
income
|
-
|
-
|
-
|
11
|
-
|
11
|
Total comprehensive income for the year
|
-
|
-
|
(308)
|
245
|
-
|
(63)
|
Transactions with owners:
|
|
|
|
|
|
|
Shares issued in the year
|
6
|
-
|
-
|
-
|
-
|
6
|
Merger relief on acquisition of Terminix Global Holdings,
Inc.
|
-
|
-
|
3,014
|
-
|
-
|
3,014
|
Gain on stock options
|
-
|
2
|
-
|
-
|
-
|
2
|
Cost of issuing new shares
|
-
|
-
|
(16)
|
-
|
-
|
(16)
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(122)
|
-
|
(122)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
18
|
-
|
18
|
Tax related to items taken directly to equity
|
-
|
-
|
-
|
(2)
|
-
|
(2)
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
(3)
|
-
|
(3)
|
At 31 December 2022
|
25
|
9
|
763
|
3,302
|
(1)
|
4,098
|
Adjustment on initial application of IFRS17
|
-
|
-
|
-
|
(1)
|
-
|
(1)
|
Adjusted balance as at 1 January 2023
|
25
|
9
|
763
|
3,301
|
(1)
|
4,097
|
Profit for the year
|
-
|
-
|
-
|
381
|
-
|
381
|
Other comprehensive income:
|
|
|
|
|
|
|
Net exchange adjustments offset in reserves
|
-
|
-
|
(352)
|
-
|
-
|
(352)
|
Net gain on net investment hedge
|
-
|
-
|
109
|
-
|
-
|
109
|
Net gain on cash flow hedge1
|
-
|
-
|
3
|
-
|
-
|
3
|
Cost of hedging
|
-
|
-
|
9
|
-
|
-
|
9
|
Tax related to items taken directly to other comprehensive
income
|
-
|
-
|
-
|
6
|
-
|
6
|
Total comprehensive income for the year
|
-
|
-
|
(231)
|
387
|
-
|
156
|
Transactions with owners:
|
|
|
|
|
|
|
Gain on stock options
|
-
|
5
|
-
|
-
|
-
|
5
|
Dividends paid to equity shareholders
|
-
|
-
|
-
|
(201)
|
-
|
(201)
|
Cost of equity-settled share-based payment plans
|
-
|
-
|
-
|
27
|
-
|
27
|
Movement in the carrying value of put options
|
-
|
-
|
-
|
4
|
-
|
4
|
At 31 December 2023
|
25
|
14
|
532
|
3,518
|
(1)
|
4,088
|
|
Capital reduction reserve£m
|
Merger
relief
reserve
£m
|
Legal reserve£m
|
Cash flow hedge reserve£m
|
Translation reserve£m
|
Cost of hedging£m
|
Total£m
|
At 1 January 2021
|
(1,723)
|
-
|
10
|
(4)
|
(208)
|
(1)
|
(1,926)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(18)
|
-
|
(18)
|
Net gain on net investment hedge
|
-
|
-
|
-
|
-
|
15
|
-
|
15
|
Net gain on cash flow hedge1
|
-
|
-
|
-
|
13
|
-
|
-
|
13
|
Transfer between reserves
|
-
|
-
|
(10)
|
-
|
-
|
-
|
(10)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
Total other comprehensive income for the year
|
-
|
-
|
(10)
|
13
|
(3)
|
(1)
|
(1)
|
At 31 December 2021
|
(1,723)
|
-
|
-
|
9
|
(211)
|
(2)
|
(1,927)
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(232)
|
-
|
(232)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
(68)
|
-
|
(68)
|
Net loss on cash flow hedge1
|
-
|
-
|
-
|
(6)
|
-
|
-
|
(6)
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
(2)
|
(2)
|
Total other comprehensive income for the year
|
-
|
-
|
-
|
(6)
|
(300)
|
(2)
|
(308)
|
Transactions with owners:
|
|
|
|
|
|
|
|
Merger relief on acquisition of Terminix Global Holdings,
Inc.
|
-
|
3,014
|
-
|
-
|
-
|
-
|
3,014
|
Cost of issuing new shares
|
-
|
(16)
|
-
|
-
|
-
|
-
|
(16)
|
At 31 December 2022
|
(1,723)
|
2,998
|
-
|
3
|
(511)
|
(4)
|
763
|
Net exchange adjustments offset in reserves
|
-
|
-
|
-
|
-
|
(352)
|
-
|
(352)
|
Net loss on net investment hedge
|
-
|
-
|
-
|
-
|
109
|
-
|
109
|
Net gain on cash flow hedge1
|
-
|
-
|
-
|
3
|
-
|
-
|
3
|
Cost of hedging
|
-
|
-
|
-
|
-
|
-
|
9
|
9
|
Total other comprehensive income for the year
|
-
|
-
|
-
|
3
|
(243)
|
9
|
(231)
|
At 31 December 2023
|
(1,723)
|
2,998
|
-
|
6
|
(754)
|
5
|
532
|
|
Note
|
2023£m
|
2022£m
|
2021£m
|
Cash flows from operating
activities1
|
|
|
|
|
Operating profit
|
|
625
|
317
|
347
|
Adjustments for:
|
|
|
|
|
- Depreciation and impairment of property, plant and
equipment
|
|
154
|
148
|
128
|
- Depreciation and impairment of leased assets
|
|
120
|
106
|
78
|
- Amortisation and impairment of intangible assets (excluding
computer software
|
|
175
|
118
|
74
|
- Amortisation and impairment of computer software
|
|
26
|
22
|
17
|
- Other non-cash items
|
|
26
|
8
|
6
|
Changes in working capital (excluding the effects of acquisitions
and exchange differences on consolidation):
|
|
|
|
|
- Inventories
|
|
(15)
|
(4)
|
(3)
|
- Contract costs
|
|
(19)
|
(10)
|
(5)
|
- Trade and other receivables
|
|
(29)
|
5
|
59
|
- Trade and other payables and provisions
|
|
(60)
|
6
|
(32)
|
Interest received
|
|
25
|
13
|
5
|
Interest paid2
|
|
(191)
|
(52)
|
(42)
|
Income tax paid
|
|
(100)
|
(77)
|
(69)
|
Net cash flows from operating activities
|
|
737
|
600
|
563
|
Cash flows from investing activities
|
|
|
|
|
Purchase of property, plant and equipment
|
|
(167)
|
(153)
|
(128)
|
Purchase of intangible assets
|
|
(44)
|
(37)
|
(32)
|
Proceeds from sale of property, plant and equipment
|
|
14
|
5
|
7
|
Acquisition of companies and businesses, net of cash
acquired
|
8
|
(242)
|
(1,018)
|
(463)
|
Disposal of companies and businesses
|
|
-
|
1
|
-
|
Disposal of investment in associate
|
|
19
|
-
|
-
|
Dividends received from associates
|
|
4
|
4
|
4
|
Net change to cash flow from investment in term
deposits
|
|
-
|
1
|
171
|
Net cash flows from investing activities
|
|
(416)
|
(1,197)
|
(441)
|
Cash flows from financing activities
|
|
|
|
|
Dividends paid to equity shareholders
|
7
|
(201)
|
(122)
|
(139)
|
Acquisition of shares from non-controlling interest
|
|
-
|
-
|
(9)
|
Capital element of lease payments
|
|
(157)
|
(104)
|
(88)
|
Cost of issuing new shares
|
|
-
|
(16)
|
-
|
Cash (outflow)/inflow on settlement of debt-related foreign
exchange forward contracts
|
|
(3)
|
26
|
(19)
|
Proceeds from new debt
|
|
-
|
2,383
|
5
|
Debt repayments
|
|
-
|
(844)
|
(167)
|
Net cash flows from financing activities
|
|
(361)
|
1,323
|
(417)
|
Net (decrease)/increase in cash and cash equivalents
|
|
(40)
|
726
|
(295)
|
Cash and cash equivalents at beginning of year
|
|
879
|
242
|
551
|
Exchange losses on cash and cash equivalents
|
|
(7)
|
(89)
|
(14)
|
Cash and cash equivalents at end of the financial year
|
11
|
832
|
879
|
242
|
●
|
introduction of IFRS 17 Insurance contracts (for
non-issuers);
|
●
|
amendments to IAS 8 Definition of accounting
estimates;
|
●
|
amendments to IAS 1 Disclosure of accounting policies;
and
|
●
|
amendments to IAS 12 Deferred tax.
|
|
Revenue
2023
£m
|
Revenue1
2022
£m
|
Revenue1
2021
£m
|
Operating
profit
2022
£m
|
Operating
profit1
2022
£m
|
Operating
profit1
2021
£m
|
North America2
|
|
|
|
|
|
|
Pest Control
|
3,201
|
1,746
|
1,149
|
599
|
297
|
187
|
Hygiene & Wellbeing
|
105
|
103
|
142
|
18
|
18
|
29
|
|
3,306
|
1,849
|
1,291
|
617
|
315
|
216
|
Europe (incl LATAM)
|
|
|
|
|
|
|
Pest Control
|
516
|
427
|
350
|
124
|
103
|
92
|
Hygiene & Wellbeing
|
344
|
322
|
316
|
52
|
53
|
54
|
France Workwear
|
221
|
192
|
166
|
39
|
31
|
17
|
|
1,081
|
941
|
832
|
215
|
187
|
163
|
UK & Sub-Saharan Africa
|
|
|
|
|
|
|
Pest Control1
|
195
|
182
|
171
|
51
|
47
|
45
|
Hygiene & Wellbeing
|
195
|
183
|
183
|
43
|
48
|
49
|
|
390
|
365
|
354
|
94
|
95
|
94
|
Asia & MENAT
|
|
|
|
|
|
|
Pest Control
|
250
|
231
|
187
|
34
|
34
|
25
|
Hygiene & Wellbeing
|
89
|
90
|
84
|
11
|
11
|
11
|
|
339
|
321
|
271
|
45
|
45
|
36
|
Pacific
|
|
|
|
|
|
|
Pest Control
|
124
|
104
|
90
|
22
|
16
|
14
|
Hygiene & Wellbeing
|
125
|
123
|
107
|
33
|
32
|
25
|
|
249
|
227
|
197
|
55
|
48
|
39
|
Central and regional overheads
|
10
|
11
|
12
|
(121)
|
(107)
|
(96)
|
Restructuring costs
|
-
|
-
|
-
|
(7)
|
(12)
|
(10)
|
Revenue and Adjusted Operating Profit
|
5,375
|
3,714
|
2,957
|
898
|
571
|
442
|
One-off and adjusting items
|
|
|
|
(98)
|
(136)
|
(21)
|
Amortisation and impairment of intangible assets3
|
|
|
|
(175)
|
(118)
|
(74)
|
Operating Profit
|
|
|
|
625
|
317
|
347
|
|
Amortisation and
impairment of
intangibles1
2023
£m
|
Amortisation and
impairment of
intangibles1
2022
£m
|
Amortisation and
impairment of
intangibles1
2021
£m
|
North America
|
118
|
59
|
34
|
Europe (incl. LATAM)
|
24
|
29
|
14
|
UK & Sub-Saharan Africa
|
8
|
-
|
9
|
Asia & MENAT
|
11
|
20
|
7
|
Pacific
|
6
|
4
|
4
|
Central and regional
|
8
|
6
|
6
|
Total
|
175
|
118
|
74
|
Tax effect
|
(44)
|
(25)
|
(18)
|
Total after tax effect
|
131
|
93
|
56
|
|
2023
£m
|
2022
£m
|
2021
£m
|
Hedged interest payable on medium-term notes
issued1
|
61
|
39
|
10
|
Interest payable on bank loans and overdrafts1
|
42
|
5
|
3
|
Interest payable on RCF1
|
3
|
1
|
1
|
Interest payable on foreign exchange swaps2
|
44
|
19
|
14
|
Interest payable on leases
|
25
|
10
|
6
|
Amortisation of discount on provisions
|
14
|
3
|
-
|
Fair value loss on hedge ineffectiveness
|
-
|
2
|
-
|
Total finance cost
|
189
|
79
|
34
|
|
2023
£m
|
2022
£m
|
2021
£m
|
Bank interest received
|
25
|
5
|
1
|
Fair value gain on hedge ineffectiveness
|
1
|
22
|
-
|
Foreign exchange gain on translation of foreign
assets/liabilities
|
11
|
-
|
-
|
Hyperinflation accounting adjustment
|
11
|
22
|
3
|
Total finance income
|
48
|
49
|
4
|
|
2023
£m
|
2022
£m
|
2021
£m
|
Current tax expense
|
94
|
76
|
57
|
Adjustment in respect of previous periods
|
(8)
|
2
|
(3)
|
Total current tax
|
86
|
78
|
54
|
Deferred tax expense/(credit)
|
30
|
(3)
|
21
|
Deferred tax adjustment in respect of previous periods
|
(4)
|
(11)
|
(13)
|
Total deferred tax
|
26
|
(14)
|
8
|
Total income tax expense
|
112
|
64
|
62
|
|
2023
£m
|
2022
£m
|
2021
£m
|
Profit attributable to equity holders of the Company
|
381
|
232
|
263
|
|
|
|
|
Weighted average number of ordinary shares in issue
(million)
|
2,516
|
2,002
|
1,858
|
Adjustment for potentially dilutive shares (million)
|
11
|
12
|
8
|
Weighted average number of ordinary shares for diluted earnings per
share (million)
|
2,527
|
2,014
|
1,866
|
|
|
|
|
Basic earnings per share
|
15.14p
|
11.57p
|
14.16p
|
Diluted earnings per share
|
15.07p
|
11.51p
|
14.10p
|
|
2023
£m
|
2022
£m
|
2021
£m
|
2020 final dividend paid - 5.41p per share
|
-
|
-
|
100
|
2021 interim dividend paid - 2.09p per share
|
-
|
-
|
39
|
2021 final dividend paid - 4.30p per share
|
-
|
80
|
-
|
2022 interim dividend paid - 2.40p per share
|
-
|
42
|
-
|
2022 final dividend paid - 5.15p per share
|
131
|
-
|
-
|
2023 interim dividend paid - 2.75p per share
|
70
|
-
|
-
|
Total
|
201
|
122
|
139
|
|
As
reported
£m
|
Measurement
period
adjustment
£m
|
Retrospectively
adjusted
£m
|
Non-current assets
|
|
|
|
- Intangible assets
|
2,027
|
-
|
2,027
|
- Property, plant and equipment1
|
249
|
(5)
|
244
|
- Other non-current assets
|
143
|
47
|
190
|
Current assets
|
701
|
(3)
|
698
|
Current liabilities
|
(311)
|
(5)
|
(316)
|
Non-current liabilities
|
(1,875)
|
(18)
|
(1,893)
|
Net assets acquired
|
934
|
16
|
950
|
Goodwill
|
3,176
|
(16)
|
3,160
|
|
Total
2023
£m
|
Terminix Global Holdings, Inc.1
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total1
2022
£m
|
Purchase consideration
|
|
|
|
|
- Cash paid
|
203
|
1,087
|
214
|
1,301
|
- Deferred and contingent consideration
|
58
|
-
|
45
|
45
|
- Equity interests
|
-
|
3,023
|
-
|
3,023
|
Total purchase consideration
|
261
|
4,110
|
259
|
4,369
|
Fair value of net assets acquired1
|
(88)
|
(950)
|
(87)
|
(1,037)
|
Goodwill from current-year
acquisitions1
|
173
|
3,160
|
172
|
3,332
|
Goodwill expected to be deductible for tax purposes
|
76
|
-
|
60
|
60
|
|
Total
2023
£m
|
Terminix Global Holdings, Inc.1
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total1
2022
£m
|
Non-current assets
|
|
|
|
|
- Intangible assets2
|
80
|
2,027
|
74
|
2,101
|
- Property, plant and equipment3
|
12
|
244
|
14
|
258
|
- Other non-current assets
|
-
|
190
|
-
|
190
|
Current assets4
|
22
|
698
|
28
|
726
|
Current liabilities5
|
(12)
|
(316)
|
(11)
|
(327)
|
Non-current liabilities6
|
(14)
|
(1,893)
|
(18)
|
(1,911)
|
Net assets acquired
|
88
|
950
|
87
|
1,037
|
|
Total
2023
£m
|
Terminix Global Holdings, Inc.
2022
£m
|
Individually immaterial acquisitions
2022
£m
|
Retrospectively
adjusted
Total
2022
£m
|
Total purchase consideration
|
261
|
4,110
|
259
|
4,369
|
Equity interests
|
-
|
(3,023)
|
-
|
(3,023)
|
Consideration payable in future periods
|
(58)
|
-
|
(45)
|
(45)
|
Purchase consideration paid in cash
|
203
|
1,087
|
214
|
1,301
|
Cash and cash equivalents in acquired companies and
businesses
|
(8)
|
(313)
|
(9)
|
(322)
|
Cash outflow on current period acquisitions
|
195
|
774
|
205
|
979
|
Deferred and contingent consideration paid
|
47
|
-
|
39
|
39
|
Cash outflow on current and past acquisitions
|
242
|
774
|
244
|
1,018
|
|
Goodwill1
£m
|
Customer
lists
£m
|
Indefinite-lived brands
£m
|
Other
intangibles
£m
|
Product development
£m
|
Computer
software
£m
|
Total1
£m
|
Cost
|
|
|
|
|
|
|
|
At 1 January 2022
|
1,888
|
876
|
-
|
67
|
46
|
163
|
3,040
|
Exchange differences
|
(72)
|
(5)
|
(107)
|
2
|
(1)
|
6
|
(177)
|
Additions
|
-
|
-
|
-
|
-
|
10
|
27
|
37
|
Disposals/retirements
|
-
|
(180)
|
-
|
(12)
|
-
|
(1)
|
(193)
|
Acquisition of companies and businesses¹
|
3,336
|
779
|
1,292
|
23
|
-
|
11
|
5,441
|
Hyperinflationary adjustment
|
14
|
3
|
-
|
1
|
-
|
-
|
18
|
Disposal of companies and businesses
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
At 31 December 2022 (retrospectively adjusted)
|
5,165
|
1,473
|
1,185
|
81
|
55
|
206
|
8,165
|
Exchange differences
|
(269)
|
(70)
|
(58)
|
(5)
|
-
|
(3)
|
(405)
|
Additions
|
-
|
-
|
-
|
-
|
10
|
34
|
44
|
Disposals/retirements
|
(2)
|
(15)
|
-
|
(12)
|
-
|
(8)
|
(37)
|
Acquisition of companies and businesses
|
172
|
69
|
-
|
11
|
-
|
-
|
252
|
Hyperinflationary adjustment
|
14
|
3
|
-
|
1
|
-
|
-
|
18
|
At 31 December 2023
|
5,080
|
1,460
|
1,127
|
76
|
65
|
229
|
8,037
|
Accumulated amortisation and impairment
|
|||||||
At 1 January 2022
|
(44)
|
(635)
|
-
|
(48)
|
(32)
|
(117)
|
(876)
|
Exchange differences
|
1
|
(31)
|
-
|
(2)
|
-
|
(5)
|
(37)
|
Disposals/retirements
|
-
|
179
|
-
|
12
|
-
|
1
|
192
|
Hyperinflationary adjustment
|
-
|
(1)
|
-
|
-
|
-
|
-
|
(1)
|
Impairment charge
|
(22)
|
-
|
-
|
-
|
-
|
-
|
(22)
|
Amortisation charge
|
-
|
(85)
|
-
|
(6)
|
(5)
|
(22)
|
(118)
|
At 31 December 2022
|
(65)
|
(573)
|
-
|
(44)
|
(37)
|
(143)
|
(862)
|
Exchange differences
|
12
|
26
|
-
|
2
|
-
|
3
|
43
|
Disposals/retirements
|
2
|
15
|
-
|
12
|
-
|
7
|
36
|
Hyperinflationary adjustment
|
(10)
|
(1)
|
-
|
-
|
-
|
-
|
(11)
|
Impairment charge
|
(3)
|
(1)
|
-
|
-
|
-
|
-
|
(4)
|
Amortisation charge
|
-
|
(155)
|
-
|
(9)
|
(7)
|
(26)
|
(197)
|
At 31 December 2023
|
(64)
|
(689)
|
-
|
(39)
|
(44)
|
(159)
|
(995)
|
Net book value
|
|
|
|
|
|
|
|
At 1 January 2022
|
1,844
|
241
|
-
|
19
|
14
|
46
|
2,164
|
At 31 December 20221
|
5,100
|
900
|
1,185
|
37
|
18
|
63
|
7,303
|
At 31 December 2023
|
5,016
|
771
|
1,127
|
37
|
21
|
70
|
7,042
|
|
Land and
buildings
£m
|
Service contract equipment
£m
|
Other plant and
equipment
£m
|
Vehicles
and office
equipment
£m
|
Total
£m
|
Cost
|
|
|
|
|
|
At 1 January 2022
|
87
|
518
|
188
|
210
|
1,003
|
Exchange differences
|
5
|
27
|
11
|
15
|
58
|
Additions
|
7
|
112
|
19
|
19
|
157
|
Disposals
|
(1)
|
(72)
|
(7)
|
(27)
|
(107)
|
Acquisition of companies and businesses
|
29
|
2
|
4
|
30
|
65
|
Reclassification from IFRS 16 ROU assets1
|
-
|
-
|
-
|
8
|
8
|
At 31 December 2022
|
127
|
587
|
215
|
255
|
1,184
|
Exchange differences
|
(7)
|
(20)
|
(5)
|
(15)
|
(47)
|
Additions
|
7
|
123
|
14
|
23
|
167
|
Disposals
|
(9)
|
(77)
|
(9)
|
(25)
|
(120)
|
Acquisition of companies and businesses
|
-
|
1
|
1
|
8
|
10
|
Hyperinflationary adjustment
|
4
|
-
|
-
|
1
|
5
|
Reclassification from IFRS 16 ROU assets1
|
-
|
-
|
-
|
8
|
8
|
At 31 December 2023
|
122
|
614
|
216
|
255
|
1,207
|
Accumulated depreciation and impairment
|
|
|
|
|
|
At 1 January 2022
|
(31)
|
(314)
|
(135)
|
(125)
|
(605)
|
Exchange differences
|
(3)
|
(18)
|
(8)
|
(11)
|
(40)
|
Disposals
|
1
|
72
|
6
|
25
|
104
|
Impairment charge
|
(8)
|
-
|
-
|
-
|
(8)
|
Depreciation charge
|
(3)
|
(96)
|
(14)
|
(27)
|
(140)
|
At 31 December 2022
|
(44)
|
(356)
|
(151)
|
(138)
|
(689)
|
Exchange differences
|
2
|
14
|
5
|
7
|
28
|
Disposals
|
4
|
75
|
8
|
22
|
109
|
Hyperinflationary adjustment
|
(1)
|
-
|
-
|
(1)
|
(2)
|
Depreciation charge
|
(5)
|
(102)
|
(15)
|
(32)
|
(154)
|
At 31 December 2023
|
(44)
|
(369)
|
(153)
|
(142)
|
(708)
|
Net book value
|
|
|
|
|
|
At 1 January 2022
|
56
|
204
|
53
|
85
|
398
|
At 31 December 2022
|
83
|
231
|
64
|
117
|
495
|
At 31 December 2023
|
78
|
245
|
63
|
113
|
499
|
|
Gross
amounts
2023
£m
|
Gross
amounts
2022
£m
|
Cash at bank and in hand
|
1,080
|
1,713
|
Money market funds
|
153
|
236
|
Short-term bank deposits
|
329
|
221
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
1,562
|
2,170
|
Bank overdraft
|
(730)
|
(1,291)
|
Cash and cash equivalents in the Consolidated Cash Flow
Statement
|
832
|
879
|
|
Opening
2023
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)
£m
|
Non-cash (foreign exchange
and other)
£m
|
Closing
2023
£m
|
Bank and other short-term borrowings
|
(1,345)
|
664
|
(106)
|
(347)
|
(1,134)
|
Bank and other long-term borrowings
|
(3,574)
|
-
|
-
|
421
|
(3,153)
|
Lease liabilities
|
(460)
|
182
|
(162)
|
(5)
|
(445)
|
Other investments
|
1
|
-
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
(71)
|
39
|
(1)
|
56
|
23
|
Gross debt
|
(5,449)
|
885
|
(269)
|
125
|
(4,708)
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
2,170
|
(601)
|
-
|
(7)
|
1,562
|
Net debt
|
(3,279)
|
284
|
(269)
|
118
|
(3,146)
|
|
Opening
2022
£m
|
Cash
flows
£m
|
Non-cash
(fair value changes, accruals and acquisitions)1
£m
|
Non-cash (foreign exchange
and other) 1
£m
|
Closing
2022 1
£m
|
Bank and other short-term borrowings1
|
(459)
|
(121)
|
(762)
|
(3)
|
(1,345)
|
Bank and other long-term borrowings
|
(1,256)
|
(2,257)
|
-
|
(61)
|
(3,574)
|
Lease liabilities1
|
(217)
|
114
|
(217)
|
(140)
|
(460)
|
Other investments
|
1
|
-
|
-
|
-
|
1
|
Fair value of debt-related derivatives
|
(22)
|
(7)
|
19
|
(61)
|
(71)
|
Gross debt1 (retrospectively
adjusted)
|
(1,953)
|
(2,271)
|
(960)
|
(265)
|
(5,449)
|
Cash and cash equivalents in the Consolidated Balance
Sheet
|
668
|
1,591
|
-
|
(89)
|
2,170
|
Net debt1 (retrospectively
adjusted)
|
(1,285)
|
(680)
|
(960)
|
(354)
|
(3,279)
|
Level 1
|
- unadjusted quoted prices in active markets for identical
assets or liabilities;
|
Level 2
|
- inputs other than quoted prices that are observable for the asset
or liability either directly as prices or indirectly through
modelling based on prices; and
|
Level 3
|
- inputs for the asset or liability that are not based on
observable market data.
|
Financial instrument
|
Hierarchy level
|
Valuation method
|
Financial assets traded in active markets
|
1
|
Current bid price
|
Financial liabilities traded in active markets
|
1
|
Current ask price
|
Listed bonds
|
1
|
Quoted market prices
|
Money market funds
|
1
|
Quoted market prices
|
Interest rate/currency swaps
|
2
|
Discounted cash flow based on market swap rates
|
Forward foreign exchange contracts
|
2
|
Forward exchange market rates
|
Borrowings not traded in active markets (term loans and uncommitted
facilities)
|
2
|
Nominal value
|
Money market deposits
|
2
|
Nominal value
|
Trade payables and receivables
|
2
|
Nominal value less estimated credit adjustments
|
Contingent consideration (including put option
liability)
|
3
|
Discounted cash flow using WACC
|
|
Facility
amount
2023
£m
|
Drawn at
year end
2023
£m
|
Headroom
2023
£m
|
Interest rate
at year end
2023
%
|
Non-current
|
|
|
|
|
$700m term loan due October 2025
|
550
|
550
|
-
|
5.94
|
$1.0bn RCF due October 2028
|
785
|
-
|
785
|
0.14
|
|
Facility
amount
2022
£m
|
Drawn at
year end
2022
£m
|
Headroom
2022
£m
|
Interest rate
at year end
2022
%
|
Non-current
|
|
|
|
|
$700m term loan due October 2025
|
579
|
579
|
-
|
4.9
|
$1.0bn RCF due October 2028
|
827
|
-
|
827
|
0.14
|
|
Bond interest coupon
2023
|
Effective hedged interest rate
2023
|
Bond interest coupon
2022
|
Effective hedged interest rate
2022
|
Current
|
|
|
|
|
€400m bond due November 2024
|
Fixed 0.950%
|
Fixed 3.60%
|
Fixed 0.950%
|
Fixed 3.08%
|
Non-current
|
|
|
|
|
€500m bond due May 2026
|
Fixed 0.875%
|
Fixed 2.80%
|
Fixed 0.875%
|
Fixed 1.78%
|
€850m bond due June 2027
|
Fixed 3.875%
|
Fixed 5.01%
|
Fixed 3.875%
|
Fixed 3.98%
|
€600m bond due October 2028
|
Fixed 0.500%
|
Fixed 2.23%
|
Fixed 0.500%
|
Fixed 1.30%
|
€600m bond due June 2030
|
Fixed 4.375%
|
Fixed 4.48%
|
Fixed 4.375%
|
Fixed 4.38%
|
£400m bond due June 2032
|
Fixed 5.000%
|
Fixed 5.20%
|
Fixed 5.000%
|
Fixed 5.11%
|
Average cost of bond debt at year-end rates
|
3.97%
|
|
3.28%
|
|
Termite damage
claims1
£m
|
Self-
insurance
£m
|
Environmental1
£m
|
Other
£m
|
Total1
£m
|
At 1 January 2022
|
-
|
37
|
11
|
13
|
61
|
Exchange differences1
|
(29)
|
(7)
|
-
|
-
|
(36)
|
Additional provisions
|
3
|
30
|
-
|
8
|
41
|
Used during the year
|
(10)
|
(26)
|
(2)
|
(8)
|
(46)
|
Unused amounts reversed
|
-
|
(6)
|
-
|
(2)
|
(8)
|
Acquisition of companies and businesses1
|
354
|
136
|
7
|
1
|
498
|
Unwinding of discount on provisions
|
3
|
1
|
-
|
-
|
4
|
At 31 December 20221(retrospectively
adjusted)
|
321
|
165
|
16
|
12
|
514
|
|
|
|
|
|
|
At 1 January 2023
|
321
|
165
|
16
|
12
|
514
|
Exchange differences
|
(14)
|
(8)
|
(1)
|
1
|
(22)
|
Additional provisions
|
15
|
56
|
3
|
7
|
81
|
Used during the year
|
(73)
|
(44)
|
(2)
|
(7)
|
(126)
|
Unused amounts reversed
|
-
|
(8)
|
-
|
(3)
|
(11)
|
Acquisition of companies and businesses
|
-
|
-
|
-
|
1
|
1
|
Unwinding of discount on provisions
|
11
|
3
|
-
|
-
|
14
|
At 31 December 2023
|
260
|
164
|
16
|
11
|
451
|
|
2023Total£m
|
Retrospectively
adjusted
2022Total1£m
|
Analysed as follows:
|
|
|
Non-current1
|
357
|
381
|
Current
|
94
|
133
|
Total
|
451
|
514
|
●
|
Discount rate - The exposure to termite damage claims is largely
based within the United States, therefore measurement is based on a
seven-year US bond risk-free rate. During 2023, interest rates (and
therefore discount rates) have moved up and are at their highest
level in over a decade. Rates could move in either direction and
management has modelled that an increase/decrease of 5% in yields
(would decrease/increase the provision by £3m (2022:
£3m). Over the 12 months to 31 December 2023, seven-year
risk-free rate yields have decreased c.4% from 4.03% to
3.88%.
|
●
|
Claim value - Claim value forecasts have been based on the latest
available historical settled Terminix claims. Claims values are
dependent on a range of inputs including labour cost, materials
costs (e.g. timber), whether a claim becomes litigated or not, and
specific circumstances including contributory factors at the
premises. Management has determined the historical time period for
each material category of claim, between three months and one year,
to determine an estimate for costs per claim. Recent fluctuations
in input prices (e.g. timber prices) means that there is potential
for volatility in claim values and therefore future material
changes in provisions. Management has modelled that an
increase/decrease of 5% in claim values would increase/decrease the
provision by c.£15m (2022: £14m). Over the 12 months to
31 December 2023, as a result of accelerating the clear down of
legacy longstanding claims and other macroeconomic factors, in-year
costs per claim rose by c.32% (2022: 17%).
|
●
|
Claim rate - Management has estimated claim rates based on
statistical historical incurred claims. Data has been captured and
analysed by a third-party agency, to establish incidence curves
that can be used to estimate likely future cash outflows. Changes
in rates of claim are largely outside the Group's control and may
depend on litigation trends within the US, and other external
factors such as how often customers move property and how well they
maintain those properties. This causes estimation uncertainty that
could lead to material changes in provision measurement. Management
has modelled that an increase/decrease of 5% in overall claim rates
would increase/decrease the provision by c.£15m (2022:
£14m), accordingly. Over the 12 months to 31 December 2023
claim rates fell by c.7% (2022: 16%).
|
●
|
Customer churn rate - If customers choose not to renew their
contracts each year, then the assurance warranty falls away. As
such there is sensitivity to the assumption on how many customers
will churn out of the portfolio of customers each year. Data has
been captured and analysed by a third-party agency, to establish
incidence curves for customer churn, and forward looking
assumptions have been made based on these curves. Changes in churn
rates are subject to macroeconomic factors and to the performance
of the Group. A 1% movement in customer churn rates, up or down,
would change the provision by c.£11m up or down (2022:
£10m), accordingly. On average over the last 10 years churn
rates have moved by +/- c.1.8% per annum (2022:
+/-1.2%).
|
|
2023£m
|
2022£m
|
Issued and fully paid
|
|
|
At 31 December - 2,522,539,885 shares (2022:
2,520,039,885)
|
25
|
25
|
●
|
the Group Financial Statements, which have been prepared in
accordance with UK-adopted International Accounting Standards and
International Reporting Financial Standards as issued by the
International Accounting Standards Board, give a true and fair view
of the assets, liabilities, financial position and profit of the
Group;
|
●
|
the Company's Financial Statements, which have been prepared in
accordance with United Kingdom Accounting Standards, comprising FRS
101 'Reduced Disclosure Framework', give a true and fair view of
the assets, liabilities, financial position and profit of the
Company; and
|
●
|
the Annual Report includes a fair review of the development and
performance of the business and the position of the Group, together
with a description of the principal risks and uncertainties that it
faces.
|
Date:
07 March 2024
|
RENTOKIL INITIAL PLC
|
|
/s/ Stuart
Ingall-Tombs
|
|
Name:
Stuart Ingall-Tombs
|
|
Title:
Chief Financial Officer
|
|
|