Dettol manufacturer Reckitt raises prices by 9.7%

Reckitt shares hit highest level in more than a year as nearly 10% price increases boost Dettol maker’s full-year earnings expectations

  • Reckitt Benckiser has raised its full-year revenue forecast amid rising prices
  • The group’s share price jumped sharply today as turnover increased by 11.9%

Reckitt Benckiser raised its full-year revenue forecast after strong price increases helped it beat second-quarter sales expectations.

The group’s quarterly revenue on a like-for-like basis jumped 11.9% at constant exchange rates, well above the 6.8% growth expected by analysts.

Reckitt raised prices 9.7% in the quarter, while sales volume increased 2.2%.

Rising prices: Reckitt has increased its prices by 9.7% in recent months

Reckitt shares rose sharply today and were up 4.3% or 274.00p at 6,648.00p by mid-morning.

In the quarter, Reckitt posted an operating profit of £1.75 billion, compared to a loss of £1.83 billion in the same period a year earlier.

Quarterly sales also received a 3.3% increase in sales of its Enfamil infant formula amid supply shortages in the United States, after market leader Abbott Laboratories recalled dozens of brands in February. .

Reckitt, which was previously the second-largest player in the US $4.8 billion-a-year infant formula market, has since taken over the top spot and now feeds about half of the nation’s infants.

Boss Laxman Narasimhan said: “We have clearly seen the supply situation helping us in terms of overall market share.

“We will see some standardization as a competitor comes back online, but we have a company with a brand that is the most recommended brand.”

“Driving our earnings model to mitigate the very challenging inflationary environment is a key objective across our organization. Our productivity program delivered more than £370 million in savings in the first half, well ahead of our expectations.

“This, combined with a favorable product mix and pricing, along with one-time and short-term benefits, enabled us to achieve first-half adjusted operating profit growth well in excess of revenue growth. neat business.”

Russ Mould, chief investment officer at AJ Bell, said: ‘A short-term boost from a baby formula shortage in the US after a competitor closed no doubt contributed to the impressive results. , but there were also other positive signs.

“Sales of cold and flu remedies have done well as Covid becomes endemic in many populations. And, in any case, the demand for cleaning products and medicines should remain quite resilient whatever the economic context.

“Reckitt’s concern will be that busy consumers realize they don’t need to pay a few pounds for a box of Nurofen when they can buy unbranded ibuprofen for a fraction of the price. Or that bleach from the supermarket can do about the same toilet cleaning job as Dettol.

“It will be an important test for the company and it will be interesting to see how it reacts in the second half of the year.”

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