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good to see cleaning and sex keeps going while Greece burns its bridges...
Reckitt Benckiser (RB.) has agreed to sell the personal care brands of Paras Pharmaceuticals to Indian consumer product company Marico for an undisclosed amount. Reckitt bought Paras in April 2011 for around 460 million pounds in order to develop its healthcare range in India. The assets to be disposed include deodorant brand Zatak and hair care product Livon and are expected to generate around 150 crore rupees (19.4 million pounds) in turnover for the current financial year. Share in Reckitt gained 31p to 3,567p.
Last week, Reckitt Benckiser´s chief executive, Rakesh Kapoor, unveiled the company´s “new strategy for continued outperformance,” along with a new vision and purpose. “Our vision is a world where people are healthier and live better. Our purpose is to make a difference by giving people innovative solutions for healthier lives and happier homes,” he said. The next billion consumers will be found in emerging economies where the middle class is growing fast. However, the move is slightly behind the curve. This focus on emerging markets has been Unilever’s strategy for a number of years. Spirits group Diageo has also deployed a similar plan. Growth looks likely to be pedestrian but the company remains a cash-generating machine. This week’s gains have closed the earnings multiple gap with Unilever. Reckitt shares are trading on a prospective 2012 multiple of 14.5 and Unilever is on 14.9. Although Reckitt’s management is top-notch, Unilever is further down the line with its move into these markets. There are also questions over how popular brands such as Airwick and Clearasil will be in fledgling economies. Questor now prefers Unilever and investors should use gains in the past week to sell Reckitt shares Questor says.
2012 Targets 2012 will be a year of transition and investment for RB, the details of which will be explained in the strategic overview press release, which will be released later this morning. We continue to be committed to market outperformance and therefore target the following: Net revenue growth (excluding RBP) of +200bps versus our market growth. We expect market growth in 2012 to be 1-2%. Operating margins (excluding RBP) to be maintained. The likelihood of generic competition to Suboxone makes setting total Company (inclusive of RBP) targets impossible at this time. RB will aim to update the market on total Company targets later in the year.
Commenting on the full year results, Rakesh Kapoor, Chief Executive Officer, said: "Reckitt Benckiser delivered another strong year, exceeding both our net revenue target (+12%) and adjusted net income target (+10%) in an increasingly tough environment. Like-for-like growth of 4% was underpinned by a robust performance in the base business, especially in Q4. "Growth was driven in particular by excellent growth in emerging markets, and growth in our Powerbrands - Dettol, Nurofen, Mucinex, Strepsils, Gaviscon and Harpic. SSL had a good first year with LFL growth of 6%, although full year growth is flattered by a soft Q4 last year. "At the end of 2011, the Suboxone film had captured a 48% volume share of the U.S. market. The in-market sales trend remains on a healthy growth track. "In 2012 we are targeting total Company net revenue growth, excluding RBP, of 200bps above our market growth rate. We expect the market to grow at 1-2%. 2012 will be a year of higher investment but, ex RBP, we are still targeting to maintain our operating margins. "
FY highlights (at constant exchange unless stated): Total net revenue growth of +13% to £9,485m - ahead of +12% target. LFL growth (excluding full year SSL and Paras) +4% base business (+4% including RBP). SSL net revenue growth of +6% on a LFL basis to £843m. Adjusted net income +9% actual exchange, (+11% constant) - ahead of +10% target. Net working capital of minus £910m (2010: minus £925m). Net debt of £1,795m (2010: £2,011m), with strong cash flow offset by two dividends, acquisitions and restructuring. The Board recommends a +8% increase in the final dividend to 70p per share, bringing the total dividend for 2011 to 125p (+9% versus 2010). Q4 highlights (at constant exchange unless stated): Total net revenue growth of +8% to £2,416m. LFL growth (excluding SSL and Paras) +5% base business (+3% including RBP). SSL net revenue growth of +27% to £191m.
http://www.investegate.co.uk/Article.aspx?id=20120208070000P7565
The household consumer giant Reckitt Benckiser is set to ditch quarterly reporting of profits amid fears that the long-term growth of the company is under threat. In a move which is likely to lead to downward pressure on the share price, Rakesh Kapoor, the new chief executive, is also expected to announce that the company is shifting its emphasis from America and Europe, where consumers have cut back drastically on their spending, towards emerging markets, especially China where very few of its brands are sold, The Telegraph says.
Household products group Reckitt Benckiser was given a boost on Tuesday morning by Credit Suisse, which reiterated its outperform rating on the stock. "We believe that Reckitt’s business model is still healthy and concerns over the sustainability of margins are overdone."
When directors sell shares, investors deserve to know why, especially if the sums are big. Over the past quarter, several directors have come into this category, pocketing millions of pounds in the process. Top of the list is Reckitt Benckiser chairman Peter Harf, who realised nearly £22.7m by selling 707,000 shares last month. Harf, 64, does not just own Reckitt stock on a personal basis – he also represents the interests of the Benckiser family, which own 15% of the shares through a trust. Last month’s sale prompted fears that the Benckisers might be about to ship out, but apparently this is unlikely any time soon. Harf, however, wants to use the cash for a business venture – hence his personal sale. He sold the shares at 3207p and they are now 3242p, having traded around these levels all year. Reckitt’s stable of brands includes some of the best-known products in the world, including Dettol, Vanish and Harpic. The group even added Durex and Scholl to the list this year. But analysts are worried Reckitt’s margins could come under pressure next year. Perhaps investors should follow Harf’s lead and sell some stock while the going is good, Midas says
Peter Harf, the deputy chairman of the board at Reckitt Benckiser, has once again sold millions of pounds worth of shares in the firm, totalling £23m in just three days. The company insists the director, who has occupied his position since 1999, isn't going anywhere just yet. "He's made the sale for personal-professional reasons," the firm said.
The deputy chairman of the board at Reckitt Benckiser has sold off millions of pounds worth of his stake in the firm. Peter Harf, who has occupied his position since 1999, sold 416,000 shares at 3,208.92p each for a total of £13,349,107. Towards the end of October the firm, which makes a number well-known products including Cillit Bang, Clearasil and Strepsils, announced that it expected slower growth in its pharmaceuticals division during the fourth quarter
Liberum Capital downgrades Reckitt Benckiser from hold to sell, target price 2900p.
ING downgrades Reckitt Benckiser from buy to hold, target price cut from 4055p to 3750p
SP - yes for the time being but a 'reasonable' drop today and it doesn't take much to cause jitters these days ! I like this one for 5 - 10% moves. GL 'cos we all need that!
Reckitt Benckiser, the household consumer goods giant, said it was on track to achieve "another year of above industry-average growth" after delivering barnstorming profit and revenue growth at its emerging market division, writes the Investment Column in the Independent. Still, the group – which last year acquired the Durex condoms to Scholl shoes group SSL International for £2.54bn – did not totally clean up yesterday, as its adjusted operating margin fell by 40 basis points to 26.3 per cent, dragged down, in part, by Reckitt Benckiser Pharmaceuticals (RBP). Indeed, Reckitt warned that its total growth will slow as it laps the SSL acquisition and the buy back of the distribution rights at RBP's Europe and its rest of the world business. The forward earning multiple of more than 13 also makes us cautious. Hold, suggests the paper.
Looks like Barclays got it wrong - for now at least
Barclays downgrades Reckitt Benckiser from equal weight to underweight, target cut from 3,370p to 3,000p
CE Mark has been awarded for RB to sell its Durex brand 'viagra' condom. This will be a market leading condom imho with huge potential for increase in market share for RB. See also FUM discussion boards.
Exane BNP Paribas downgrades Reckitt Benckiser from neutral to underperform, target price cut from 3700p to 3400p.
Analysts had two concerns over the halfway figures from Reckitt Benckiser — the tough market for personal care products in Europe and the slow adoption of its film version of the heroin substitute Suboxone. European sales were down 1% on a like-for-like basis in the first half and down 2% in the second quarter. The shares are selling on 14 times this year’s earnings, which suggests little upside potential. Hold, says the Times.
Reckitt Benckiser is a perennial bid target, with the usual suspects – Unilever and Procter & Gamble – often touted as the companies keen to get their hands on Reckitt’s well-known brands, which include Cillit Bang, Durex and Nurofen. The rumours seem to discount the size of Reckitt, a £25bn company, and the competition concerns that are likely to arise. Speculators are always looking to make a quick buck but the current management seems to be making a decent fist of exploiting the group’s enviable portfolio of brands. Credit Suisse thinks the group’s second quarter results will see a slowdown in year-on-year (yoy) organic growth to 3% from 4% in the first quarter. The Swiss bank reckons the operating margins will be up by one-fifth of a percentage point. “The group will also likely take the opportunity to shed some more light on its Pharma business,” Credit Suisse reckons. Panmure Gordon is expecting growth outside of the Reckitt pharmaceuticals business to remain weak. “We expect LFL [like-for-like] sales growth of 4.9% to drive 13.3% total sales growth to £2.335bn, with net acquisitions (mainly SSL) adding c10% to sales, and currency 1% negative," Panmure Gordon said.
Investec upgrades Reckitt Benckiser from sell to hold, target price raised from 2800p to 3425p.
Reckitt Benckiser, the Cillit Bang and Durex maker was said to be in the sights of Unilever or US peer Procter & Gamble. Questor from the Sunday Telegraph takes such talk with a pinch of salt. Not only has this speculation been around for some time, analysts reckon that such a move by either company could be derailed by anti-trust issues. Questor upgraded the rating on the shares to buy after it was revealed that like-for-like sales growth accelerated to 5pc in the first quarter, which was much higher than expectations. The shares had also dived after Bart Becht, its long-serving and highly remunerated chief executive, said he would step down in September. The shares were first recommended on March 6 2009 at £24.96. They are up 39pc compared with a FTSE 100 up 70pc from then. Questor upgraded the view to buy at £32.90 in April and the rating remains a buy, despite the gains. The retail environment, as we noted earlier, remains clouded; in fact, the cloud seems to be turning a shade darker every day, with news of company administrations or restructurings or another dip in the mood ofthe consumer, said the Independent on Friday.