28th Jul 2020 08:38
(Alliance News) - FTSE 100-listed Reckitt Benckiser Group PLC on Tuesday raised its outlook after a strong first half, boosted by cleaning products such as Dettol and Lysol.
The consumer goods company reported an 11% increase in net revenue in the six months to the end of June to GBP6.91 billion. On a like-for-like basis revenue grew by 12%.
Reckitt reported Hygiene like-for-like sales growth of 16% and Health growth of 9.3%.
Pretax profit rose to GBP1.44 billion from GBP1.26 billion year-on-year.
Reckitt said its underlying performance has been ahead of expectations, with the Dettol disinfectant maker getting a boost from Covid-19. Its 2020 performance is now expected to be better than forecast back in April.
"Our underlying revenue performance (pre-Covid-19) has been ahead of our early expectations for the year and overall, including favourable tailwinds from Covid-19, we now expect high single digit growth for the year as a whole. Looking to the second half, net revenue growth is expected to reflect the benefit of Covid-19 tailwinds for Dettol and Lysol, improving trends in IFCN, offset by likely ongoing uncertainties of pantry-unloading, particularly for our OTC portfolio when combined with a likely weaker cough/cold and flu season and ongoing headwinds caused by social distancing," said Reckitt.
2020 margins are expected to be in line with current consensus expectations, it added.
Reckitt said it is on-track to delivering its productivity goals in 2020, with its first-half targets met, with savings of GBP165 million delivered, despite some elements of the programme being delayed as a result of Covid-19.
The company said it intends to increase its investments in new sources of revenue from GBP2.0 billion to GBP2.2 billion in an expanded plan over the next three years, optimising its programme to establish consistent performance, then build revenue momentum and finally achieve sustained outperformance.
Reckitt declared an interim dividend of 73p, flat on a year ago.
The stock was trading 1.5% lower in London on Tuesday at 7,606.00 pence a share.
By Evelina Grecenko; [email protected]
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