A sizeable £300m compensation payment for victims of lung damage and possible deaths in South Korea linked to the use of humidifier sanitisation products dwarfed Reckitt Benckiser's (RB.) half-year results statement. Reckitt was not the only company to sell the humidifier sanitisation products, but had the largest share of the market there through its Oxy RB business. Half-year operating profit dropped more than a fifth on a constant-currency basis to £762m, but excluding the disbursement rose 11 per cent to nearly £1.1bn.
South Korea only represents 1.5 per cent of net revenues, but the company's products are still largely boycotted in the country at present. Chief executive Rakesh Kapoor said RB had made a "humongous" effort to reach out to those affected but acknowledged it was unlikely sentiment would improve quickly.
Elsewhere, net revenue grew 3 per cent on a like-for-like basis for the Europe and North America division, and rose a healthy 9 per cent across developing markets. The health segment was the standout performer, with like-for-like sales up 8 per cent thanks to innovations such as Durex Invisible condoms and the Scholl hard skin remover.
Analysts at Shore Capital expect pre-tax profit of £2.72bn for the year to December 2016, leading to EPS of 294p, compared with £2.34bn and 259p in FY2015.
| RECKITT BENCKISER (RB.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 7,259p | MARKET VALUE: | £51.1bn | |
| TOUCH: | 7,260-7,264p | 12-MONTH HIGH: | 7,786p | LOW: 5,403p |
| DIVIDEND YIELD: | 2% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 1,022p* | NET DEBT: | 22% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 4.36 | 921 | 99.0 | 50.3 |
| 2016 | 4.57 | 751 | 74.5 | 58.2 |
| % change | +5 | -18 | -25 | +16 |
Ex-div: 18 Aug Payment: 29 Sep *Includes intangible assets of £12.7bn or 1,806p a share | ||||
