LONDON, Oct 27 (Reuters) - British household cleaning products group Reckitt Benckiser beat fo
recasts with a 31 percent rise in third-quarter net profits on Monday and raised its 2008 sales forecast shrugging off fears of a slowdown.
The maker of Cillit Bang cleaner, Airwick air fresheners, and Nurofen painkillers said it expected to see good growth in the fourth-quarter to put it on target for its second-best annual sales growth since the company was formed in 1999.
Chief Executive Bart Becht forecast underlying sales growth would slow to 6-7 percent in the October-December quarter, but still match its increased annual target of 9 percent after achieving 10 percent growth in the first nine-months of 2008.
'Underlying growth in the fourth-quarter of 6 to 7 percent is good in current market conditions, and will be twice as fast as the market, which is growing at around 3 percent,' he added.
Reckitt shares reversed early losses of nearly 5 percent to gain as much as 6.6 percent to 27.70 pounds after the midday results, but its already highly rated shares closed off 0.8 percent at 25.77 pounds in line with a lower London market.
Analyst Charlie Mills at brokers Credit Suisse said it was 'another consensus-beating set of results from Reckitt,' with 'no sign of any slowdown in emerging markets, and continuing strength in the developed world'.
While UBS's Eva Quiroga said, 'Reckitt remains our top-pick in the European home and personal care space, given its superior like-for-like growth, margins and cashflow.'
The group surprised investors by raising its 2008 target for overall revenue growth to 13 percent from at least 11 percent to 12 percent previously after the strong third-quarter, while it held its 11 percent net profit growth goal for 2008, both targets being at constant exchange rates.
For the first nine-months of 2008, the maker of Lysol disinfectants and Finish dishwasher products showed sales and net profits both up 12 percent at constant exchange rates, putting it in line to meet its targets for the full year.
Its underlying 2008 sales growth target was also raised to 9 percent from a previous 7-8 percent reflecting what Becht called the 'better momentum in the underlying business'.
The company posted adjusted net profits for the three months to end-September of 285 million pounds ($440 million), ahead of forecasts of 259 million pounds to 268 million pounds and a consensus of 263 million pounds.
Becht said the performance was led by the 10-percent growth in underlying sales in third-quarter and also the first nine months of the year, driven by new products such as Finish Quantum and Vanish Intelligence and the success of its top 17 powerbrands which also include Dettol, Harpic and Strepsils.
However, in the third-quarter, Reckitt relied on Eastern Europe and other emerging markets for growth, as it saw no growth in Western Europe and North America.
Reckitt shares have shown their defensive qualities this year by outperforming the FTSE 100 index by 46 percent since the start of the year and the DJ European Food and Beverage Index by 12 percent.
(Reporting by David Jones; Editing by Sharon Lindores) ($1=.6480 Pound) Keywords: RECKITT
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