Reckitt profit up but warns over growth
CONSUMER goods maker Reckitt Benckiser warned of shrinking European growth and posted its first ever quarter-on-quarter underlying sales dip in the region yesterday.
The British group, which makes nearly half its sales in Europe, said growth had virtually disappeared in its markets there.
However, Reckitt saw a 21 per cent rise in second quarter overall pre-tax profit to £507m
from £415m in the same period last year. Sales were up 10 per cent.
Last week the group agreed to buy Durex condom and Scholl sandal maker SSL, for £2.54bn. Reckitt – which makes Cillit Bang cleaners, Air Wick airfresheners, Nurofen painkillers and Finish dishwash products – said second quarter revenue in Europe slipped one per cent while operating profit was unchanged from a similar period last year.
Chief executive Bart Becht said: “Six months ago we were seeing four per cent growth in our markets in Europe now it is below one per cent. In Europe there is now virtually no market growth.”
Becht added that the group had broadly held on to its market share in Europe but was down in fabric care products such as Vanish.
Analyst James Edwards Jones at broker Execution Noble said: “We believe that competitive activity will get more difficult in the second half and now see significant risks to full-year targets.”