Impressive profits make Reckitt gleam and raise full-year expectations |
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Wed, 27 Jul 2005 02:35
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Reckitt Benckiser shone clean and bright, swearing by its products, as it displayed an increase in its interim dividend as well as an expected rise in its full-year profits.
Manufacturer of household products like Dettol, Lysol, Airwick Freshmatic air freshener and Vanish dual power stain remover, came out with flying colours as it published results surpassing forecasts, with an impressive 16% hike in profits before tax, i.e. about £360m in the first half.
In addition, it posted an 8% growth in revenue to £2bn that was chiefly triggered by its highly acclaimed new introductions, like Airwick Freshmatic air freshener and Vanish dual power stain remover.
Following its dynamic half-year results, Reckitt has understandably raised its full year profit predictions against the erstwhile low double-digit growth at constant exchange rates. Furthermore, Reckitt augmented its interim dividend by 13% to 18 pence a share, stating that it planned to raise its share buyback to £350m from £300m after 2006.
Meanwhile, scaling oil prices have prompted Reckitt to make intelligent moves and refurbishing its packaging designs. The company intends to adopt alternate packaging methods and materials other than the expensive plastic that is derived from oil. Bart Becht, chief executive of Reckitt revealed the company’s new packaging plans saying, “We have re-engineered several products to take out much of the plastic. It's more environmentally friendly and it helps our profit margin.”
Stringent cost restraints pushed operating margins up 30 basis points to reach 17.1% in the first half, while gross operating margins went down 20 basis points and hit 54.4%. Reckitt forecast a reasonable improvement in the gross margin figure for the complete year.
Additionally, the European venture of Reckitt that comprises about 53% of group revenue had sales growth of about 6% due to its novel launches, while North American and Australian sales scaled 3% high along with developing regions that witnessed sales growth of 14%.
Cheerful results as these sent shares of the company to go 42p up, to end at £17.07.
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