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)|
|*Includes intangible assets of £30.6bn or 4,313p a share|