Reckitt Benckiser is getting a big make-over. As well as changing its name to RB, the health and hygiene giant is pursuing a separate listing for its pharmaceutical business, RBP. Chief executive Rakesh Kapoor has still not ruled out a "sale along the way", but said a de-merger through a listing on the London Stock Exchange was the "preferred option" and would take place over the next 12 months. RB might retain a minority stake in the standalone business, which made £183m of profit from £344m of sales in the half-year, and which analysts have valued at anything between £1.5bn to £5bn.
As for the rest of the company, currency headwinds were responsible for the sales decline, but at constant rates revenue grew 4 per cent. The consumer health division, which accounts for 30 per cent of group net revenue, enjoyed a particularly strong six months, with a 10 per cent jump in like-for-like sales, helped by Scholl, Mucinex and Durex. Hygiene (44 per cent of sales) also performed well, with 3 per cent underlying growth. The disappointment was flat trading at the Home division, which was driven by weak sales of AirWick.
The 30 per cent jump in reported operating profit can be explained by exceptional charges last year. Strip these out and profit rose just 3 per cent at constant rates. For the full year, Deutsche Bank expects pre-tax profit of £2.44bn, down from £2.59bn in 2013.
| RB (RB.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 5,183p | MARKET VALUE: | £37bn | |
| TOUCH: | 5,180-5,185p | 12-MONTH HIGH: | 5,280p | LOW: 4,225p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 870p* | NET DEBT: | 36% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 4.99 | 0.90 | 91.9 | 60 |
| 2014 | 4.67 | 1.04 | 112.7 | 60 |
| % change | -6 | +16 | +23 | - |
Ex-div: 6 Aug Payment: 25 Sep *Includes intangible assets of £11.2bn, or 1,554p a share | ||||
