Source - Alliance News

- Reckitt Benckiser Group PLC on Thursday posted a full-year loss but beat expectations on the revenue front, with the firm looking towards a margin improvement in the year ahead despite inflationary pressures.

Shares in Reckitt were up 4.3% at 6,057.00 pence each in London early Thursday, making it the top performer in the FTSE 100 in morning trade.

Hygiene and household goods firm Reckitt said revenue in 2021, lapping tough comparatives, fell 5.4% to £13.23 billion from £13.99 billion. At constant currency, the decline was 0.3%. However, this topped company-compiled consensus of £13.18 billion.

Excluding the contribution of its former Infant Formula & Child Nutrition business in China, Reckitt’s annual revenue fell 2.1% to £12.85 billion from £13.13 billion, though beat expectations of £12.80 billion. At constant currency rates, revenue by this measure was up 3.3%.

Reckitt back in June agreed to sell the business to Primavera Capital Group for $2.2 billion. The disposal was completed in September.

The Nurofen painkiller maker swung to a pretax loss of £260 million for the year from a £1.87 million profit in 2020, due primarily to a huge loss on disposal. The China IFCN business was one of three disposals Reckitt made in 2021. The trio of sales resulted in a pretax loss on disposal of £3.52 billion. No such costs were registered in 2020.

Excluding the China IFCN business, Reckitt made an adjusted operating profit of £2.94 billion for the year, in line with consensus, but down 8.5% on the year before. The adjusted operating margin of 22.9% was down 160 basis points on 2020 amid cost inflation.

Chief Executive Laxman Narasimhan said Reckitt’s aim to ‘rejuvenate sustainable growth’ is on track. Like-for-like net revenue in 2021 rose 3.5% at constant currency and was up 17% from 2019.

In the fourth quarter alone, like-for-like net revenue increased 3.3%.

Reckitt explained: ‘Our Health business saw strong growth of 18% led by growth of over 40% in our [over-the-counter] portfolio, with a strong start to the ’flu season, a continued strong performance from our Intimate Wellness portfolio and stabilisation in Dettol.’

Reckitt recommended a final payout of 101.6 pence per share, unchanged from 2020. Its annual dividend was also unchanged at 174.6p per share.

Looking to 2022, it targets like-for-like net revenue growth between 1% and 4%.

‘We are targeting growth in adjusted operating margins in 2022, from our base of 22.9%, underpinned by multiple levers, despite significant commodity inflationary pressures,’ Reckitt added.

The firm said it will ‘apply appropriate pricing’ in order to offset inflation pressures.

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