Reckitt hikes dividend as emerging‑market strength drives solid Q4 growth

(Sharecast News) - Consumer goods giant Reckitt posted solid fourth‑quarter momentum on Thursday, with core like‑for‑like net revenue up 5.9% and the wider group advancing 5.4%, underpinned by strong gains in emerging markets, leading the firm to up its full-year dividend payout.

Reckitt said sales in developing economies jumped 17.2%, helped by double‑digit growth in China, India and a range of smaller high‑potential territories. Europe, however, fell 4.5% amid tougher category conditions and a weaker cold and flu season, while North America returned to growth, rising 2.5% on the back of continued strength in non‑seasonal brands.

Reckitt's self care, germ protection and intimate wellness units all delivered high‑single‑digit growth in Q4, though household care declined mid‑single‑digits. Mead Johnson Nutrition rose 3.2%, driven by favourable price/mix. Q4 group like-for-like revenues rose 5.4%, with core LFL up 5.9%.

For the year as a whole, like‑for‑like group revenues increased 5% to £14.21bn, with price/mix contributing 4.1% and volumes up 0.9%. Core Reckitt revenues grew 5.2% to £10.23bn, while reported revenues ticked up 0.3%, reflecting FX headwinds and M&A effects.

Full-year adjusted operating profits grew 5.3% at constant currency rates to £3.54bn, ahead of revenue, with margins expanding 40 basis points to 24.9%. Gross margin edged up by 10 basis points to 60.8%, supported by productivity gains and stable input costs.

Adjusted pre-tax profits rose 5.2% to £3.32bn, while adjusted diluted EPS increased 1.1% to 352.8p. Reckitt also hiked its full‑year dividend by 5% to 212.2p, alongside a 235p special dividend paid in February 2026.

Free cash flow came in at £1.71bn, down year‑on‑year due to higher restructuring and tax payments, while net debt fell to 1.6x EBITDA, aided by year‑end cash proceeds from divestments ahead of the special dividend payment.

Reporting by Iain Gilbert at Sharecast.com

Reckitt