(Alliance News) - Rentokil Initial PLC on Thursday maintained its yearly outlook after a "positive start" to 2024, amid a "stabilising performance" in the key North America region.

The pest control and hygiene firm said revenue rose 0.9% to GBP1.27 billion in the first quarter of the year from GBP1.26 billion a year before. It grew 4.9% at constant exchange rates. Rentokil noted 3.1 percentage points of that came from organic revenue growth, hailing "continued pricing momentum".

In North America alone, Rentokil reported 1.5% organic revenue growth.

"We have made a positive overall start to 2024. The group has performed well and our 'right way 2' plan has delivered a stabilising performance in North America. With the key trading period for the business ahead of us, we remain confident in delivering on our guidance of 2% to 4% organic revenue growth in the region," Chief Executive Andy Ransom said.

Organic revenue rose across all categories in the three months that ended March 31, climbing 2.7% in Pest Control, 3.8% in Hygiene & Wellbeing and 7.7% in its France Workwear arm.

Rentokil said the integration of bumper acquisition Terminix saw "further progress towards".

The company hailed "completion of the merger of the Rentokil and Terminix legal entities into Rentokil North America Inc with all employees, customers and suppliers now contracted to the same legal entity.

"The legal combination is a critical enabler of future integration activities, which will allow for shared use of resources and the harmonisation of operating standards and pay plans."

Rentokil completed its acquisition of pest control business Terminix for USD6.7 billion in October 2022.

In addition to expecting North America organic revenue growth of 2% to 4% for 2024, Rentokil also still predicts "modest margin projection" in the region.

In 2023, Rentokil booked revenue of GBP5.38 billion, a rise of 45%, and pretax profit of GBP493 million, up over two-thirds.

CEO Ransom added: "As the year proceeds, we look forward to continued progress, driven by our focus on North America growth and the Terminix integration plan, which is in the advanced stages of preparation for the first full branch integrations commencing mid-year."

Rentokil shares were down 3.4% to 431.70 pence each in London on Thursday morning. The wider FTSE 100 index was up 0.5%.

By Eric Cunha, Alliance News news editor

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