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Rentokil's 2025 Profit Impacted by Terminix Deal Delays

Rentokil Initial's 2025 profits are expected to be affected by delays in realizing benefits from its acquisition of Terminix, compounded by weak North American sales.

Rentokil Initial, a leading British pest control company, has announced that its profits and margins for 2025 will be negatively impacted due to delays in realizing the benefits from its acquisition of U.S. rival Terminix. The $6.7 billion acquisition, completed in 2021, has faced integration challenges, leading to a two- to three-month delay in expected benefits. Rentokil has been reviewing its branch network and pay plans for technicians and sales staff, which has contributed to the delay. Additionally, the company has been grappling with weak sales in North America, exacerbated by higher-than-expected material and consumable costs due to inflation. Despite these challenges, Rentokil had previously projected $200 million in annual cost savings from the Terminix deal by 2025, an increase from an earlier estimate of $150 million. However, the company's shares have recently hit a new 52-week low, trading as low as GBX 336.30. Analysts have mixed views on Rentokil's prospects, with some maintaining a 'buy' rating while others have adjusted their price targets downward. The company's market capitalization stands at £8.56 billion, with a dividend yield of 0.67%.

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