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Reckitt buoyed by Dettol demand

First-quarter sales increased across the group’s hygiene and health businesses
May 1, 2020

Consumer stockpiling of cough remedies and disinfectant gave Reckitt Benckiser (RB.) a serious boost in the first quarter. Revenues for the three months to March landed at £3.5bn – up by 13.3 per cent on a like-for-like basis.

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By division, hygiene sales rose by 12.8 per cent, while health – which includes household cleaning brand Dettol – climbed 13.6 per cent. Meanwhile, e-commerce revenues grew by more than a half, as restrictions on movement drove customers online. It follows that Reckitt now anticipates a full-year performance better than original expectations.

Chief executive Laxman Narasimhan did concede that it was unclear from recent trends what the split was between defensive buying and higher levels of underlying consumption. But he also said that greater usage of hygiene products “may well sustain” beyond the current crisis – even if there is some “unwinding of ‘pantry load’".

The strength of Reckitt’s numbers cast something of a shadow over the more mixed results presented by Unilever (ULVR) a week earlier. Unilever’s underlying sales for home care were up 2.4 per cent, thanks to the increasing popularity of Cif surface cleaner and Domestos bleach. But the consumer goods giant’s ice cream and out-of-home food service businesses were severely hampered by lockdown measures, leading to flat revenues overall. In fairness, ‘stay at home’ policies also meant that Reckitt saw modest declines in sales of Durex during March, along with discretionary products such as foot-care brand Scholl.