On the back of an anaemic second quarter, Reckitt Benckiser's (RB.) like-for-like sales were broadly flat during the first half of 2019 as volumes declined 3 per cent. In light of this slow start, guidance for full-year like-for-like sales growth has been revised downwards to 2-3 per cent, from the 3-4 per cent range previously expected.
The health segment - which accounted for almost two-thirds of revenue - suffered a 1 per cent decline in like-for-like sales. A decline in the Chinese birth rate over the past two years caused momentum in infant formula and child nutrition (IFCN) to falter, restricting sales growth to just 2 per cent. Meanwhile lower incidences of cold and flu, and related inventory destocking by retailers at the start of the year, caused over-the-counter (OTC) revenue to decline by 5 per cent.
By contrast, the hygiene home division pushed like-for-like sales 3 per cent higher, to the upper-end of medium-term expectations, although this was measured against a strong volume and weak price mix comparator. Broad-based growth was enjoyed across Europe, North America and developing markets.
Bloomberg consensus forecasts give adjusted pre-tax profit of £3.19bn and EPS of 346p for the full year, rising to £3.35bn and 364p in 2020.
| RECKITT BENCKISER (RB.) | ||||
| ORD PRICE: | 6,415p | MARKET VALUE: | £ 45.5bn | |
| TOUCH: | 6,413-6,416p | 12-MONTH HIGH: | 7,174p | LOW: 5,559p |
| DIVIDEND YIELD: | 2.7% | PE RATIO: | 20 | |
| NET ASSET VALUE: | 2,035p* | NET DEBT: | 73% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 6.14 | 1.11 | 123 | 70.5 |
| 2019 | 6.24 | 1.26 | 138 | 73.0 |
| % change | +2 | +14 | +12 | +4 |
| Ex-div: | 22 Aug | |||
| Payment: | 26 Sep | |||
| *Includes intangible assets of £30.6bn or 4,313p a share | ||||
