July 30, 2020 / 6:52 AM / 4 days ago

UPDATE 2-Rentokil revenues gets disinfection boost as businesses reopen

* Ongoing revenue up 1%

* Company plans to expand hygiene category

* Operating profit down 9.4%

* Shares hit record high (Adds shares, analysts comments, detail on expansion)

By Yadarisa Shabong

July 30 (Reuters) - Revenues at pest-control and deep-cleaning service provider Rentokil were boosted in the first half by higher standards of hygiene and expansion of its disinfection services as businesses reopen after the coronavirus lockdowns.

Shares of the FTSE 100 company rose to a record high on Thursday after profit and revenue beat analysts' expectations. It said it hoped to resume dividends this year if the second half performs in line with its expectations.

Operating in around 80 countries and employing roughly 40,000 people globally, Rentokil's services to hotels, restaurants, schools and the airline industry were stalled by lockdowns, forcing it to lay off some staff, suspend dividends and cut back on spending.

"Our Hygiene business, which was more impacted by customer shutdowns, has moved from being considered a low interest (but nonetheless required service) to arguably one of the world's most important business categories," Chief Executive Officer Andy Ransom said.

The business, which operates across 46 markets, providing hand soaps, sanitizers and deep cleaning services, saw revenue grow 10.5% as reopening businesses implemented higher hygiene standards. Ongoing group revenue rose 1% to 1.28 billion pounds ($1.66 billion).

Rentokil also said it was expanding its hygiene category into new countries and introducing additional services such as hand hygiene products and services, surface hygiene and disinfection services.

The company said ongoing operating profit fell 9.4% to 138.8 million pounds, mainly due to costs related to bad debts and the protective equipment for employees demanded by the crisis.

Rentokil added that a majority of its staff were now back at work and it has repaid the Bank of England's Covid Corporate Financing Facility and resumed its mergers and acquisitions programme.

"Rentokil has become a much cleaner, sharper business under its current management," analysts at HSBC said.

Shares rose 3.3% to 567.2 pence by 0753 GMT. ($1 = 0.7718 pounds) (Reporting by Yadarisa Shabong in Bengaluru; editing by Rashmi Aich, Larry King)

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