Here’s why Reckitt Benckiser shares are down almost 10% on Tuesday morning
- Reckitt Benckiser swung to a pre-tax loss in the fiscal first half.
- The British firm declared 73 pence per share of an interim dividend.
- Shares of the company tanked about 10% on Tuesday morning.
Reckitt Benckiser Group plc (LON: RB) tanked nearly 10% in the stock market on Tuesday morning as the consumer goods company said higher costs weighed on its revenue in the fiscal first half. Consequently, it swung to a pre-tax loss in H1.
H1 financial performance
Reckitt Benckiser reported £1.94 billion of pre-tax loss for the six months versus the year-ago figure of £1.44 billion in profit. The owner of prominent brands like Harpic, Dettol, and Durex generated £6.60 billion of revenue in the first half – a decline from £6.91 billion of revenue in the same period last year.
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According to FactSet, experts had forecast £6.72 billion of revenue in H1. For fiscal 2022, the British multinational expects revenue to grow by mid-single-digit. At the time of writing, Reckitt Benckiser is valued at £44.73 billion.
In separate news from the United Kingdom, Reach plc said its profit and revenue jumped in the fiscal first half.
Reckitt Benckiser declared an interim dividend
Reckitt Benckiser declared 73 pence per share of an interim dividend – unchanged from last year. Commenting on the financial update, the FTSE 100 listed company said:
“Cost inflation accelerated in the second quarter, and it will take time to offset this headwind with productivity and pricing actions being implemented in the back half of the year and early next year.”
Reckitt Benckiser warned that that performance in the third quarter might be weak because of the tough year-ago comparatives. Flu and cold business, it added, will catch pace again in Q4.
“Overall demand in the disinfectant category remains significantly higher than pre-COVID levels, and the two-year stacked growth of our hygiene portfolio is up 34.1%,” the company added.