Reckitt Benckiser (RB.) has been restructuring in order to focus on faster-growing emerging markets and health and hygiene products, while also cutting costs. Despite tough market conditions, that's paying off and full-year like-for-like sales growth reached 5 per cent (at constant currencies), while the gross margin improved 50 basis points to 57.9 per cent.
The Latin America and Asia division reported a 17 per cent jump in underlying profits to £464m - driven by sales of brands such as Durex and Scholl. Underlying profits rose 3 per cent to £290m at the Russia, Middle East and Africa operations, despite competitive markets. The newly created Europe North America unit made progress, too, with sales there up 3 per cent in the fourth quarter - helped by demand for such products as Strepsils amid a higher incidence of cold and flu.
Reckitt entered the fast-growing vitamins market in December, too, after acquiring Schiff for $1.4bn (£892m). It also announced a three-year agreement this month with Bristol-Myers Squibb to sell its healthcare brands in Brazil and Mexico. And, while pharmaceuticals - responsible for a fifth of earnings - faces generic competition for opiate dependency product, suboxone, the development of a film-based delivery system offers some defence.
Deutsche Bank expects 2013 adjusted EPS of 269.5p (from 264.4p in 2012).
| RECKITT BENCKISER (RB.) | ||||
|---|---|---|---|---|
| ORD PRICE: | 4,404p | MARKET VALUE: | £31.7bn | |
| TOUCH: | 4,403-4,404p | 12-MONTH HIGH: | 4,498p | LOW: 3,274p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 823p* | NET DEBT: | 41% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 6.56 | 1.47 | 158 | 80.0 |
| 2009 | 7.75 | 1.89 | 199 | 100 |
| 2010 | 8.45 | 2.14 | 217 | 115 |
| 2011 | 9.49 | 2.38 | 240 | 125 |
| 2012 | 9.57 | 2.42 | 253 | 134 |
| % change | +1 | +2 | +5 | +7 |
Ex-div: 20 Feb Payment: 30 May *Includes intangible assets of £11.2bn, or 1,554p a share | ||||
