Reckitt keeps up the pace

published 30 July 2012

Cillit Bang maker Reckitt Benckiser maintained its like-for-like sales growth in the second quarter of 2012.

Net revenue in the first half of the year was £4,669m, up 1% year-on-year using actual exchange rates and up 4% on a constant exchange rates (CER) basis.

Like-for-like (LFL) sales growth on a CER basis was 4% in the second quarter, the same as in the first quarter, giving a growth rate of 4% for the first six months of the year.

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The group said growth was driven by strong performances in emerging markets.

Profit before tax edged up to £1,064m in the first half of the year from £1,038m in the corresponding period of 2011. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) hardened to £1,192m from £1,183m the year before.

Adjusted earnings per share climbed to 111.1p from 109.0p in the first half of 2011.

Net debt of £1,846m at the end of June was up from £1,795m at the end of 2011, reflecting the final 2011 dividend payment and share repurchases.

The company said its half year results position to well to achieve its full year 2012 financial targets. The plan is for the group, excluding Reckitt Benckiser Pharmaceuticals (RBP), to achieve like-for-like net revenue growth of two percentage points ahead of its market growth. "We continue to expect the market to grow at 1-2%. We also expect to maintain margins on an adjusted basis (ex RBP) as we invest behind brand equity building initiatives," the group said.

"Six months into our Purpose driven strategy, Reckitt Benckiser has delivered revenue growth well ahead of our market," said Rakesh Kapoor, Reckitt's Chief Executive Officer.

"Our H1 [first half] margins are in line with expectations with higher input costs and increased investment being partially offset by cost savings programmes. The new organisation structure is fully in place and we are seeing early benefits of increased operational focus: speed, scale and consistency of our execution. RBP continues to make very good progress with the Suboxone sub-lingual film now at 56% market volume share," Kapoor added.

The interim dividend has been hiked 2% to 56p per share from 55p last year.