Asia Pacific
Principal Geographies
- Australia
- New Zealand
- Malaysia
- Indonesia
- South Korea
- Singapore
- Hong Kong
Principal Activities
- Textiles and Washroom Services
- Pest control
- Tropical plants
- Facilities services
Our Objective:
To build and capitalise upon market leading positions in core group businesses in the world’s fastest growing markets.
Strategic Priorities:
- Drive organic growth ahead of market
- Deepen pest control market positions
- Secure acquisition synergy benefits in Washroom (Australia and South East Asia)
Our pest control business in Australia was transformed in 2007. A number of acquisitions and organic growth meant that it exited the year 150% bigger than it began. The largest acquisition – Campbell Brothers – not only added scale and geographic reach to the business, but also extended the service offering into the residential market. Australia has a major termite control market, previously not targeted. Given Rentokil’s unmatched global expertise in this area, the business is set for success.
In 2007, the Asia Pacific division was awarded one of the world’s largest pest control contracts by the Government of Hong Kong. This is expected to generate revenues in excess of £20 million over the two-year contract period. Critical to its success was the ability to recruit and train 1,200 pest controllers in just six weeks. The team rose to the challenge brilliantly.
Key Performance Indicators
| £m | Change vs 2006 | |
|---|---|---|
| Revenue | 158.3 | + 55.0% |
| Organic revenue | + 12.0% | |
| Operating profit | 31.0 | + 53.5% |
| Adjusted operating profit | 31.0 | + 31.4% |
| Net adjusted margin | 19.6% | -3.5% |
| Contract portfolio gain | 30.2 | + 37.3% |
| New business wins | 29.6 | + 142.6% |
| Net additions/reductions | 3.6 | + 16.1% |
| Acquisitions | 11.4 | -40.3% |
| Terminations | (14.4) | + 16.1% |
| Retention rate | 86.0% | + 1.3% |
Market Conditions
The markets for all services remained favourable in 2007 reflecting the general growth in the economies in the Asia Pacific region as well as an increased focus on health and hygiene standards.
2007 Review
Asia Pacific achieved strong double-digit growth in 2007 with revenue up 55% at £158.3 million and adjusted profits up 31.4% at £31 million. Organic revenue growth was 12.0% compared with 5.7% for 2006. The division’s contract portfolio grew by 29.3%, 18.2% excluding acquisitions. The strongest revenue and profit growth came from Rentokil Pest Control.
Rentokil Pest Control continued to demonstrate strong performance and achieved triple-digit growth in revenue and profit, boosted by the Hong Kong Government pest control contract and strong organic growth and acquisitions in Australia, New Zealand, Malaysia, Singapore, Thailand and China. The financial and commercial performance of Rentokil Taiming (China) and Rentokil Ding Sharn (Taiwan) have been particularly encouraging. Pest Control revenue was £64.8 million (2006: £31.5 million).
Initial Washroom Services ended the year well ahead of 2006, achieving double-digit growth in revenue and profit in its key markets of Australia, Singapore, Malaysia, Indonesia and Hong Kong. Washroom revenue (excluding our associate in Japan) was £74 million (2006: £61.7 million).
Ambius tropical plants in Australia demonstrated solid progress with both revenue and profit more than double last year as a result of strong organic growth and acquisition activity during the year.
During the year we continued our strategy of building stronger market positions to expand our footprint, investing £74.5 million on acquisitions. The largest transaction was Campbell Brothers, an Australian pest control business. Other notable acquisitions included Taiming Pest Control in China, One-Stop Fumigation and Pesterminator in Singapore: and a number of tropical plants businesses in Australia. In addition, we made new market entry acquisitions in India, Brunei and Vietnam.
2008 Preview
In 2008 we continue to expect growth ahead of the western economies. Approximately two-thirds of the division’s profits are currently sourced in Australia, where we continue to see opportunities to improve the performance of our business. However, growth in North Asia and South East Asia is running well ahead of Australia and over time the balance of the division’s businesses will shift towards Asia.