Rentokil expects worsening impact of coronavirus amid lockdowns

Pest control-to-hygiene firm Rentokil Initial has warned that it expects the hit from coronavirus to worsen in its second quarter amid global lockdowns due to the pandemic.

The group said that, while pest and control and hygiene services have largely been classed as essential by governments worldwide, its revenues have been affected since mid-March by the closure of businesses as more countries went into lockdown.

But Rentokil is planning to tap into an expected surge in demand for pest control and hygiene as countries recover from the Covid-19 pandemic, particularly hand cleaning and specialist disinfection clean-up services.

Its update showed that revenues across Italy plunged 15.3% in March after the country was placed in tight lockdown for several weeks, while sales tumbled 20.1% in India last month.

But overall in the quarter, ongoing revenues lifted 7.2%, with foreign exchange movements stripped out, to £630.5 million.

Total group revenue growth pulled back sharply in March to 4.4% as the crisis took hold.

In China, where the pandemic first started, Rentokil said its operations were returning to normal, with all employees able to go back to work.

It added that sales jumped 34.5% in Hong Kong in the quarter thanks to high demand for specialist hygiene services to combat the spread of the virus.

The group is positioning itself for similar demand for hygiene services worldwide and has re-trained around an extra 7,000 specialist disinfection staff and is now offering this service in 60 markets worldwide.

Customers include offices, schools, government buildings, food retailers, bus fleets and emergency vehicles, and Rentokil said it is in talks with international clients over contracts spanning a number of countries.

Chief executive Andy Ransom said: “The actions we are taking now will allow us to rebuild our business to full strength and to play an ever bigger role through the recovery phase in protecting public health and ensuring safe working environments around the world.

“As we are seeing already in China, Hong Kong and South Korea, the crisis will subside over time and, when it does, it is my strong conviction that we will have the best people, skills, innovations and technologies to help our customers get quickly and safely back to business.”