2024-02-11 10:05:00 ET
Summary
- A dramatic 30% share price fall in reaction to a profit warning at Rentokil triggered Chris’s efforts to underwrite the pest control opportunity.
- We believe Rentokil’s culture will help to bring additional progress towards further improving Terminix’s culture and operational processes.
- Due to the quarterly profit volatility making the company “uninvestable” for the compounder crowd, the business trades for 18x 2023 earnings.
- This is before significant synergies ripple through the income statement— which should push group margins to best-in-class levels globally.
The following segment was excerpted from this fund letter.
Rentokil ( RTO )
A dramatic 30% share price fall in reaction to a profit warning at Rentokil triggered Chris’s efforts to underwrite the pest control opportunity. In the merger integration with Terminix, one of the leading brands in the US pest control market, Rentokil had a marketing hiccup as teams transitioned. This caused the company to report lower US organic growth than its highly valued “compounder” peer Rollins (which owns the Orkin brand)....
Read the full article on Seeking Alpha
For further details see:
GreenWood Investors - Rentokil: Synergies Ripple Should Push Margins To Best-In-Class Levels