Rentokil Initial, the FTSE 100 pest control company, has reported a significant financial charge related to termite damage in the United States despite delivering solid overall revenue growth. The London-listed firm announced on Friday it has increased its provisions by $47 million to address historical compensation claims arising from property damage tied to Terminix, its US pest control subsidiary acquired for $6.7 billion in 2021. This adjustment brings the total amount set aside for these claims to $392 million.

The company’s half-year results showed revenue rising 6.7 percent to $3.6 billion, up from $3.4 billion in the first half of 2025, alongside an 18.4 percent increase in pre-tax profit to $263 million. Despite these gains, investor sentiment turned negative following the announcement. Rentokil's shares fell sharply, dropping 20.6 percent—equivalent to 91.25 pence—closing at 352 pence. This marked the steepest decline on the FTSE 100 index that day.

The broader UK equity market experienced a modest dip, with the FTSE 100 finishing down 11.14 points, or 0.1 percent, at 10,897.27. Although the index had reached an intraday high of 10,979.60 earlier—just shy of its record closing level of 10,910.55 set on February 27—the late sell-off was partly influenced by Rentokil’s share movements.

Market analysts noted that the significant increase in provisions signaled ongoing challenges related to Terminix’s legacy issues, which continue to weigh on investor confidence despite Rentokil’s underlying business performance. The firm’s willingness to recognize substantial liabilities for past termite damage claims demonstrates its commitment to addressing legal settlements but also highlights the financial risks tied to the Terminix acquisition.