RB..L Share News (RB.)

(Sharecast News) - Consumer goods giant Reckitt Benckiser reported a jump in first-half net revenue and profit on Tuesday thanks to a strong performance from its health and hygiene businesses as the Covid-19 pandemic boosted demand for cleaning and pain relief products.
Pre-tax profit for the period rose to £1.4bn from £1.3bn in the first half of last year, with net revenue up 10.8% to £6.9bn. Revenue from the hygiene business was up 13.9% to £2.7bn, while the health segment saw an 8.8% increase to £4.2bn.

Reckitt said demand for disinfectant Dettol grew strongly amid the pandemic, up 62% compared to the same period last year, with growth in both developed and emerging markets.

The company's interim dividend was held steady at 73p a share, in line with the guidance given in February.

Chief executive officer Laxman Narasimhan said: "The world has changed beyond recognition in 2020. Covid-19 is likely to be with us for the foreseeable future and, as a society, we are embedding new hygiene practices to protect our way of life.

"We have the largest portfolio of surface disinfectant brands, including Dettol, Lysol and Sagrotan. Our largest brands are trusted by our consumers, as evident in their performance. Our supply chain has withstood the challenge of unprecedented demand, demonstrating agility and flexibility, albeit with additional costs and investments. Our Hygiene and base Health businesses have both performed well, with strong volume growth in challenging circumstances."

The company said its 2020 performance is now expected to be better than it expected in April, but the outlook for the year balance of the year 2020 remains uncertain.

At 1025 BST, the shares were up 0.5% at 7,758p.

CMC Markets analyst David Madden said: "The stock hit a three-year high last week, so it seems as that dealers were factoring in positive numbers today."

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Underneath the noise Reckitt does still have work to do, not least in the baby formula business which has been a drag on performance ever since it was bought. Rejuvenating its brands, is one of the driving forces behind a £2.2bn investment programme.

"Sales growth was stuttering before the outbreak, and while current conditions are somewhat of a jumpstart, it's unlikely to pave the way to sustainable long-term revenue and profit growth. If anything, the priority now will be finding a way to make sure coronavirus doesn't end up delaying turnaround plans. The group's right to chase short-term opportunities while it can, but it would be a shame to see investments aimed at brightening the long-term being funnelled elsewhere."