Share count
2.5Bpeak FY2024
← All companies ← RSKD Manual RY → ← RSKD Commercial Services & Supplies SCI →
RTO, Rentokil Initial plc
Commercial Services & Supplies diversified
A diversified business; where the profit really comes from, and whether it is earned or bought, is what the segment detail settles.
The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2024
£5.4B
+1.1% YoY · 18% 4-yr CAGR
Vital signs · TTM, with 5-yr average
Revenue £5.4B 5-yr avg £4.1B
The business in brief
What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Operating margin has run about 10% through the cycle, a solid margin the cost base and competition set as much as the price does. That margin has held in a narrow 8.5%–12% band over the years, so steadiness itself is the evidence — the lever is unit growth and cost discipline, not a moving line.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 9%). By owner earnings: roughly 12% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2020–2024
realized figures from each filing · older years to the left| 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | TTMTTMDec 2024 | |
|---|---|---|---|---|---|---|
| Income statement | ||||||
| £2.8B | £3.0B | £3.7B | £5.4B | £5.4B | £5.4B | RevenueRevenue |
| £294M | £347M | £317M | £625M | £549M | £549M | Operating incomeOp. inc. |
| 10.5% | 11.7% | 8.5% | 11.6% | 10.1% | 10.1% | Operating marginOp. mgn |
| £186M | £263M | £232M | £381M | £307M | £307M | Net incomeNet inc. |
| 19% | 19% | 22% | 23% | 24% | 24% | Effective tax rateTax rate |
| Cash flow & returns | ||||||
| £548M | £563M | £600M | £737M | £678M | £678M | Operating cash flowOp. cash |
| £362M | £300M | £368M | £356M | £371M | £371M | Working capital & otherWC & other |
| £130M | £128M | £153M | £167M | £171M | £171M | CapexCapex |
| 4.6% | 4.3% | 4.1% | 3.1% | 3.1% | 3.1% | Capex / revenueCapex/rev |
| £418M | £435M | £447M | £570M | £507M | £507M | Owner earningsOwner earn. |
| 14.9% | 14.7% | 12.0% | 10.6% | 9.3% | 9.3% | Owner earnings marginOE mgn |
| £418M | £435M | £447M | £570M | £507M | £507M | Free cash flowFCF |
| 14.9% | 14.7% | 12.0% | 10.6% | 9.3% | 9.3% | Free cash flow marginFCF mgn |
| — | £139M | £122M | £201M | £229M | £229M | Dividends paidDiv. paid |
| 21% | 15% | 5% | 9% | 7% | 7% | ROICROIC |
| 16% | 21% | 6% | 9% | 7% | 7% | Return on equityROE |
| — | 10% | 3% | 4% | 2% | 2% | Retained to equityRetained/eq |
| Balance sheet | ||||||
| — | £670M | £2.2B | £1.6B | £927M | £927M | Cash & investmentsCash+inv |
| — | £527M | £830M | £880M | £909M | £909M | ReceivablesReceiv. |
| — | £136M | £200M | £207M | £229M | £229M | InventoryInvent. |
| — | £764M | £1.2B | £1.1B | £1.1B | £1.1B | Accounts payablePayables |
| — | (£101M) | (£136M) | (£57M) | £20M | £20M | Operating working capitalOper. WC |
| — | £1.3B | £3.2B | £2.7B | £2.1B | £2.1B | Current assetsCur. assets |
| — | £1.4B | £2.8B | £2.6B | £2.6B | £2.6B | Current liabilitiesCur. liab. |
| — | 1.0× | 1.1× | 1.0× | 0.8× | 0.8× | Current ratioCurr. ratio |
| — | £1.8B | £5.1B | £5.0B | £5.2B | £5.2B | GoodwillGoodwill |
| — | £1.3B | £3.6B | £3.2B | £2.5B | £2.5B | Total debtDebt |
| — | £586M | £1.4B | £1.6B | £1.6B | £1.6B | Net debt / (cash)Net debt |
| 3.8× | 10.2× | 4.0× | 3.3× | 2.8× | 2.8× | Interest coverageInt. cov. |
| £1.1B | £1.3B | £4.1B | £4.1B | £4.2B | £4.2B | Shareholders’ equityEquity |
| Per share | ||||||
| 1.85B | 1.86B | 2.00B | 2.52B | 2.52B | 2.52B | Shares out (diluted)Shares |
| £1.51 | £1.59 | £1.86 | £2.14 | £2.16 | £2.15 | Revenue / shareRev/sh |
| £0.10 | £0.14 | £0.12 | £0.15 | £0.12 | £0.12 | EPS (diluted)EPS |
| £0.23 | £0.23 | £0.22 | £0.23 | £0.20 | £0.20 | Owner earnings / shareOE/sh |
| £0.23 | £0.23 | £0.22 | £0.23 | £0.20 | £0.20 | Free cash flow / shareFCF/sh |
| — | £0.07 | £0.06 | £0.08 | £0.09 | £0.09 | Dividends / shareDiv/sh |
| £0.07 | £0.07 | £0.08 | £0.07 | £0.07 | £0.07 | Cap. spending / shareCapex/sh |
| £0.61 | £0.68 | £2.05 | £1.63 | £1.68 | £1.68 | Book value / shareBVPS |
Per-share growththe realized rate an owner's share compounded
| 4-yr | 5-yr | |
|---|---|---|
| Revenue / share | +9.3%/yr | +9.3%/yr (4-yr) |
| Owner earnings / share | −2.8%/yr | −2.8%/yr (4-yr) |
| EPS | +4.9%/yr | +4.9%/yr (4-yr) |
| Dividends / share | +6.7%/yr (3-yr) | +6.7%/yr (3-yr) |
| Capital spending / share | −0.8%/yr | −0.8%/yr (4-yr) |
| Book value / share | +28.8%/yr | +28.8%/yr (4-yr) |
The record, charted
FY2020–2024Each measure over its full record; the current point and the worst year marked.
ROIC
7%low FY2022
Net debt ÷ owner earnings
3.1×peak FY2022
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
£507Mowner earningsvs.£307Mnet incomelow FY2020
Where the cash went
ReinvestBuybacksDividendsAcquisitionsRetainedEach year's operating cash, by what management did with it: the mix, and how it drifts.
FY2020FY2024
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2024 the business turned £307M of profit into £507M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | |
|---|---|---|---|---|---|
| Reported net income | £307M | £381M | £232M | £263M | £186M |
| Working capital & othertiming of cash in and out, other non-cash items | +£371M | +£356M | +£368M | +£300M | +£362M |
| Cash from operations | £678M | £737M | £600M | £563M | £548M |
| Capital expenditurecash put back in to keep running and to grow | −£171M | −£167M | −£153M | −£128M | −£130M |
| Owner earnings | £507M | £570M | £447M | £435M | £418M |
| Owner-earnings marginowner earnings ÷ revenue | 9% | 11% | 12% | 15% | 15% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2024 20-F · source on SEC EDGAR →
Will it survive?
- AdequateOperating income £549M ÷ interest expense £197M
What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
- How heavy is the debt, net of cash? £1.6B · 2.9× operating profitMeaningful net debtCash £925M + ST investments £2M − debt £2.5B
What this means
Netting £927M of cash and short-term investments against £2.5B of debt leaves £1.6B owed, about 2.9× a year's operating profit (4.6× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Solid through the cycle5-yr median, range 5%–21%; 7% latest = NOPAT £416M ÷ invested capital £5.8BIndustry peers: median 15%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 5 years (it ran 7% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Solid through the cycle5-yr median margin, range 9%–15%; latest £507M = operating cash £678M − maintenance capex £171MIndustry peers: median 9%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 9% of revenue this year, a 12% median across 5 years.
- Cash-backedCash from ops £678M ÷ net income £307M
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks £229M ÷ Owner Earnings £507M
What this means
Of £507M Owner Earnings, £229M (45%) went back to shareholders, £229M dividends, £0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? —Not enough data
What this means
The filing data didn't include the inputs for this check.
Graham’s defensive tests · 1 of 4 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · £5.4B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.81×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · £2.5B vs (£488M) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (5-yr record) · no losses
What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record MissUninterrupted dividends · 4 of 5 yrs
What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are £0.12/share (latest year £0.12), the averaged base the calculator's gate runs on, and book value is £1.67/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2020–2024
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 5 of 5
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 1 of 4 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 11% → 11% (2-yr avg ends)
What this means
Through the cycle the operating margin held roughly steady — about 11% early, 11% lately, median 10%.
- Reinvestment, incremental ROIC 10%
What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
- Owner earnings growth +6%/yr
What this means
Owner earnings grew about 6% a year over the record.
- Worst year 2022 · 8.5% op. margin
What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count +8.0%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
- Dividend record rising
What this means
Paid and raised the dividend across the record, the continuity Graham prized.
Does AI threaten the moat?
Elevated contestabilityThe product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.
The product is the kind capable AI most directly contests: when a substitute can be built cheaply, the incumbent's pricing power is the first thing at risk. The record cannot say whether the moat outlasts that; past durability is a starting point, not a promise.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2024Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets£2.1B
- Cash & short-term investments£927M
- Receivables£909M
- Inventory£229M
- Other current assets£22M
Current liabilities£2.6B
- Accounts payable£1.1B
- Other current liabilities£1.5B
Current ratio0.81×all current assets ÷ what's due · Graham looked for 2×
Quick ratio0.72×stricter: inventory excluded
Cash ratio0.36×strictest: cash alone against what's due
Working capital(£488M)the cushion left after near-term bills
Deeper floors
Tangible book value(£928M)equity stripped of goodwill & intangibles
Debt incl. operating leases£2.9B£445M of it operating leases
From the company's latest filing.
How the cash was used, 2020–2024
Over the record, the business generated £3.1B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.
- Reinvested£749M · 24%
- Dividends£691M · 22%
- Retained (debt / cash)£1.7B · 54%
- Returned to owners£691M
29% of the owner earnings the business produced over the span, £691M as dividends and £0 as buybacks.
- Net change in share count36.2%
The diluted count rose from 1853M to 2524M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record£0.09/sh
Paid in 4 of the years on record, the per-share dividend growing about 7% a year. It was cut at least once along the way.
- Return on what it retained11%
Of the earnings it kept rather than paid out (£678M over the span), annual owner earnings (first three years vs last three) grew £75M, so each retained £1 added about 0.11 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Inverting the record
Invert: instead of why Rentokil Initial plc is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2020–2024.
2 of the 3 tests turned up something to look into; the other 1 came back clean.
- Look hereIs it less profitable than it was?10.0% vs 14.8%
The owner-earnings margin averaged 14.8% early in the record and 10.0% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
- Look hereDid the share count rise anyway?36.2%
Diluted shares grew 36.2% over 2020–2024. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.
And these came back clean
- Did reported profit become cash?
Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.
Peers, Commercial Services & Supplies
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| RTORentokil Initial plc | £5.4B | — | 10.5% | 9% | 12% |
| GGenpact | $5.1B | 36% | 12.4% | 15% | 11% |
| VVXV2X Inc. | $4.5B | 9% | 3.6% | 11% | 3% |
| FCNFTI Consulting | $3.8B | 32% | 10.5% | 16% | 9% |
| ULSUL Solutions Inc. | $3.1B | 48% | 16.2% | 27% | 10% |
| MEDPMedpace Holdings | $2.5B | — | 17.6% | 27% | 22% |
| EVHEvolent Health | $1.9B | 23% | -12.2% | -6% | -11% |
| ICFIICF International | $1.9B | 36% | 6.9% | 8% | 7% |
| Group median | — | — | 10.5% | 13% | 9% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American Depositary Shares, each representing five ordinary”; Rentokil Initial plc reports in GBP, so every figure in this tool is stated per ADS and translated at GBP 1 = $1.349 (2026-07-17, reference rate) so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed, in GBP.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Rentokil Initial plc has delivered.
$
Through the cycle, Rentokil Initial plc earns about $882M on its 12.0% median owner-earnings margin. This year’s 9.3% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · ’20→’24+6%/yr
Owner-earnings growth · ’20→’24+6%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’22–’24)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $684M on 505M shares outstanding, per the 20-F cover, as of 2025-12-31; net debt $2.1B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Rentokil Initial plc (RTO), the owner's record," https://ownerscorecard.com/c/RTO, data as of 2026-07-09.
Manual order: ← RSKD its page in the Manual RY →
Industry order: ← RSKD the Commercial Services & Supplies chapter SCI →