Shares in Rentokil Initial (LON:RTO) have climbed into positive territory in today’s session, as the blue-chip group inked a deal to offload pension liabilities to Pension Insurance Corp (PIC). The update comes after the pest control company updated investors on performance in October, posting a rise in revenue for the third quarter of the year.
As of 14:46 GMT, Rentokil’s share price had added 0.19 percent to 338.15p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.40 percent lower at 7,034.03 points. The group’s shares have added a little more than seven percent to their value over the past year, as compared with a near four-percent drop in the Footsie.
Rentokil offloads pension liabilities
Rentokil announced in a statement today that it had agreed a bulk annuity insurance ‘buy-in’ for its pension scheme with PIC, a specialist insurer of defined benefit pension schemes. The FTSE 100 group said that its scheme has liabilities of £1.5 billion. Rentokil further noted that the buy-in has been secured in anticipation of a full ‘buy-out’ of the scheme, expected to be completed in 2020.
“This transaction is a fantastic outcome for our pensioners, the company and our shareholders,” the pest control company’s chief executive Andy Ransom commented in the statement, adding that Rentokil can focus its “future investments on delivering profitable growth”.
Analysts on pest control group
The 12 analysts offering 12-month price targets for Rentokil for the Financial Times have a median target of 365.00p, with a high estimate of 440.00p and a low estimate of 325.00p. As of December 1, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group has it that the company will outperform the market.