Even the Queen Has Rat Problems

What do the Queen of England, the London stock exchange and many multinational hotels have in common?

They all use the same hitman: Rentokil, the royal rat catcher.

Buckingham Palace, like the stock exchange and other modern climate-controlled buildings, is a perfect place for rats and other pests to breed. And as they multiply, so do Rentokil’s profits.

Rentokil has increased its pretax profit by an average 22% and its per-share earnings by an average 24% every year since 1981.

“From essentially a U.K. company, we’ve built a business that is now in every major developed country--40 to be exact,” said Clive Thompson, Rentokil’s chief executive.

In 1992, the company’s environmental services division--which includes pest control and office cleaning--made $166 million in pretax profit.

“What I think we’ve done is take a U.K. pest control, timber-preserving and property-care group and set an objective to grow by at least 20% a year in terms of profits and earnings per share,” Thompson said.

About 12% to 15% of the group’s annual growth comes from Britain, while more than 25% comes from outside the U.K. This has been the group’s pattern for several years.

“We used to have 80% or 90% of business in the U.K., but now we have just over a third. Continental Europe will be a big growth area, particularly France, Germany, Spain and Italy,” Thompson said.

“We have very strong businesses in Singapore, Thailand, Malaysia, Hong Kong, Indonesia, and we’ve recently entered South Korea and Taiwan.”

Thompson said he expects the company’s extermination operations to continue to grow.

“Pests that normally die out in winter,” Thompson said, “no longer do so, and because of legislation that imposes pesticide restrictions, rodents have become resistant to chemicals and there are few alternative being developed.

“Pests are associated with dirt,” he said, “but all they need is warmth, consistency of temperature and water and, presto . . . .”

Even the Queen can’t escape.