Huge demand for cleaning products has been a boon for Reckitt Benckiser (RB), which boasts a portfolio of big-name disinfectant brands including Dettol and Lysol. For the first half to June, like-for-like sales within the group’s hygiene business escalated by 16 per cent to £2.7bn. Health, its other core business, achieved growth of almost a tenth to £4.2bn. In turn, operating profits surged by 14 per cent to £1.6bn, on a margin of 23.1 per cent – more than half a percentage point higher than the comparative period.
Little wonder, perhaps, that the consumer goods behemoth now expects its full-year performance to be better than previously guided – with the concession that pandemic-driven uncertainty continues.
That said, the group is spending money to sustain its growth trajectory, and has now lifted its targeted investment from £2bn to £2.2bn over the next three years. While the adjusted operating margin for 2020 is expected to be in line with current market expectations, investment costs – and those incurred because of the coronavirus – will affect next year’s equivalent metric. Still, Reckitt has maintained its goal of a “rebuild to mid-20s” in the medium-term.
Morgan Stanley forecasts adjusted EPS of 322p for 2020, falling to 314p in 2021.
| RECKITT BENCKISER (RB.) | ||||
| ORD PRICE: | 7,648p | MARKET VALUE: | £ 54.4bn | |
| TOUCH: | 7,644-7,652p | 12-MONTH HIGH: | 7,960p | LOW: 5,150p |
| DIVIDEND YIELD: | 2.3% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 1,409p* | NET DEBT**: | 102% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 6.2 | 1.26 | 138 | 73.00 |
| 2020 | 6.9 | 1.44 | 145 | 73.00 |
| % change | +11 | +14 | +4 | |
| Ex-div: | 20 Aug | |||
| Payment: | 29 Sep | |||
| *Includes intangible assets of £25.4bn or 3,568p a share | ||||
