Shares in Reckitt Benckiser (LON:RB) have jumped more than six percent in London this morning as the group lifted its full-year sales forecast on the back of strong performance of its infant-formula business. The maker of Durex condoms and Nurofen painkillers further posted a rise in second-quarter revenue and profits and hiked its interim payout to shareholders.
As of 10:27 BST, Reckitt Benckiser’s share price had added 6.62 percent to 6,729.00p, outperforming the benchmark FTSE 100 index which currently stands 0.43 percent higher at 7,696.23 points. The group’s shares have lost just under 10 percent of their value over the past year, as compared with an over three-percent gain in the Footsie.
Reckitt Benckiser posts results
Reckitt Benckiser updated investors on its second-quarter performance this morning, reporting that its net revenue had jumped 23 percent at actual exchange rates to £3 billion. For the half year, net revenue came in 23 percent higher at £6.14 billion, while the group’s operating profit surged 22 percent £1.45 billion. The consumer goods giant’s board declared an interim dividend of 70.5p per share, marking a six-percent increase on the prior-year period’s payout.
“Delivering growth and the successful integration of MJN [Mead Johnson Nutrition] remain our key priorities. Q2 was a quarter of progress against both of these priorities,” Reckitt Benckiser’s chief executive Rakesh Kapoor commented in the statement, adding that the integration of the business was well on track. He further noted that with the group’s Infant Formula and Child Nutrition unit exceeding expectations, the company was raising its full-year net revenue target to 14-15 percent growth at constant rates, from a previous 13-14 percent target, implying like-for-like revenue growth at the upper end of two-three percent.
Analysts weigh in on update
“Reckitts are delivering against targets, which should be well received after a few tough quarters,” said Danny Cox of Hargreaves Lansdown, as quoted by Proactive Investors, adding that “Mead Johnson Nutrition which took the group into the infant formula market in China and the USA is looking increasingly promising”.