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Reckitt Benckiser confirms de-merger

RESULTS: The health and hygiene giant has announced plans to demerge its pharmaceutical arm as a separate company listed on the London Stock Exchange.
July 28, 2014

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.

IC TIP: Hold at 5183p

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.

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