Long-suffering shareholders in pest control and hygiene business Rentokil Initial (RTO) will be hoping the firm has good news when it reports its full-year results on 6 March.

Over the past year, the shares have drifted sideways, in contrast to those of US peer Rollins (ROL:NYSE) which have chalked up a 24% gain.

The gulf between the two is even wider over five years, with Rentokil shares having lost 20% while Rollins has gained more than 90% and now boasts a market cap 50% bigger than its UK rival.

Rentokil delivered revenue growth of 3.6% in the third quarter, although that dropped to 2.6% on an organic basis and in US pest control like-for-like sales were just 1.4% higher than the previous year.

The firm said the integration of US business Terminix ‘continues to go well’, but synergy deliveries would be delayed while it carried out a review to assess the effectiveness of its new pay plans and satellite branch strategy.

Analysts at US broker Jefferies, who recently hosted a round table on the US pest control market, described fourth-quarter activity for the industry as ‘certainly above the seasonal average’ for what is usually a quieter period, with October and November seeing ‘particularly strong’ trading.

For 2025, price increases are expected to ‘moderate’ following two years of high single-digit to low double-digit inflation being passed on to customers, but labour costs and finding and retaining staff remains an issue for all the players.

Wage inflation per se was not seen as an issue, but combined with employee churn, the cost of training and the cost of insurance, maintaining operating margins was seen as ‘a challenge’ for the industry this year. 

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