Reckitt Benckiser (RKT), Tesla (US:TSLA), Meta (US:META), Jet2 (JET2), Breedon (BREE), Nichols (NICL), Bunzl (BNZL) and PZ Cussons’ (PZC)
Reckitt Benckiser (RKT) shares rose 5 per cent in early trading after like-for-like (LFL) net revenue growth came in at 1.5 per cent in the first quarter, beating market expectations.
The consumer goods giant said that price/mix growth of 2 per cent offset a 0.5 per cent decline in volumes. LFL net revenue was in growth at the hygiene and health units, but plummeted by 9.9 per cent at the nutrition arm against a comparative inflated by supply issues at a competitor.
Management reiterated its full year outlook, which will be a relief to investors after the shares were hit badly last month when the company’s nutrition subsidiary lost a US court case to the mother of a baby who died after being given its Enfamil infant formula. CA
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Tesla shares jump on new model announcement
Tesla’s (US:TSLA) share price jumped 13 per cent after it announced it would release its new affordable model sooner than expected.
The EV company’s share price has declined this year after there were reports it had given up on the $25,000 Model 2. However, chief executive Elon Musk denied this at the time and in the earnings slides the company said it had “updated our future vehicle line-up to accelerate the launch of new models ahead of our previously communicated start of production in the second half of 2025”.
Tesla already has much higher margins than competitors such as Ford (US:F) and producing a cheaper car will make it hard for the other US companies to compete in the EV market. Analysts at RBC Capital said the Model 2 is “critical to the near-term investment opportunity for Tesla”.
However, EVs sales have been slowing. In the quarter, Tesla’s revenue dropped 9 per cent year-on-year to $21.3bn while its operating profit fell 56 per cent to $1.17bn.
Although Tesla’s share price has dropped 41 per cent this year it still trades on a forward PE ratio of 48. The Model 2 will have to be a massive hit to justify that valuation. AS
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Jet2 faces pricing pressure
Jet2 (JET2) reported “more competitive” pricing in the holiday market, particularly for trips in the next five weeks.
Overall bookings for the summer are 13 per cent ahead of last year for package holidays and 18 per cent for flight-only deals, with capacity set to increase by 12 per cent. It narrowed profit before tax and currency movement forecasts for the year just closed to between £515mn-£520mn – a 33 per cent year-on-year increase – but said it was too early to give guidance for its current year, with 40 per cent of summer and most of its winter season still to sell. The shares dropped by 5 per cent. MF
Read why we’re bullish on Jet2
Overseas sales fall at Nichols
Sales at soft drinks company Nichols (NICL) decreased by 6 per cent in the first quarter of 2024 to £38.8mn. While the UK packaged business increased sales by 7 per cent to £20.4mn, international packaged sales dropped by 23 per cent to £9.8mn. Management blamed this on the timing of shipments into the Middle East and reduced volumes in Africa. Profits remain in line with expectations. JS
PZ Cussons in strategy refresh
The market responded favourably to PZ Cussons’ (PZC) announcement that it plans to sell its St. Tropez brand, which contributed around 5 per cent of total sales last year, and is “evaluating the strategic options both to reduce risk and to maximise shareholder value” in Africa. The shares rose by 4 per cent in early trading.
The company said that revenue fell by 24 per cent in the third quarter as the devaluation of the Nigerian Naira hit the Carex and Imperial Leather owner hard, with Africa revenue down 48 per cent. Revenue was flat in Europe and the Americas and 11 per cent lower in Asia Pacific. CA
