Reckitt beats forecasts due to new lines
CLEANING products group Reckitt Benckiser yesterday raised its full-year targets after beating forecasts with a 29 per cent jump in second-quarter profit but investors were focused on the loss of its US licence for Suboxone, a drug used to treat opiate addiction.
Reckitt shares had dipped on investor concerns that the British company will lose its US exclusive licence for its Suboxone drug in October, which accounts for almost 15 per cent of group earnings. The shares closed up almost one per cent at 2,868p.
The rival of Unilever and Procter & Gamble said it now expected a five to six per cent rise in underlying sales for 2009, from a previous four per cent goal, and profit up 10 to 11 per cent from eight to 10 per cent previously, both at constant currency.
The Cillit Bang cleaner, Nurofen painkiller and Lysol disinfectant maker reported a strong quarter with sales up eight per cent after stripping out the effects of currency, with growth across all areas while profit margins increased.
Chief executive Bart Becht said the group was outperforming the overall market with strong growth coming from emerging markets while Europe and North America showed slower growth.
“There is an impact from the global downturn, but we are relatively resilient seeing growth in emerging markets and gaining share in most markets,” he said.
Reckitt has outperformed its rivals over the last decade by launching a string of new products backed by heavy marketing and cutting costs, which has helped it weather the downturn.