Consumer goods group Reckitt Benckiser (RB) has released a mixed half-year report this morning, noting a decrease in like-for-like revenues but hiking the interim dividend.
The company recorded a one per cent like-for-like revenue decline over the first half, including a two per cent decline in the second quarter.
This was due to “a tough first half, with challenging conditions exacerbated by a sophisticated cyber-attack”, according to chief executive Rakesh Kapoor, who added that the business was still “addressing the full implications” of the June ransomware attack.
“The cyber-attack still feels like a bit of a limp and rather convenient excuse, especially as the deceleration in sales growth is hardly a new development,” said Russ Mould, investment director at AJ Bell.
“But America’s Mondelez, the owner of Cadbury, also blamed shipping problems caused by the malware for a disappointing statement of its own, so it may not pay to be too cynical, for once.”
RB also cited changes to India’s tax system and ongoing problems at its Korean operations, where one of its humidifier disinfectants was linked to a number of deaths, as causing problems.
The report added that RB has set aside £318m to cover an ongoing investigation by the US Department of Justice and the US Federal Trade Commission into now-divested RB Pharmaceuticals.
The business is facing litigation over claims that it delayed generic entry into the market of alternatives to its treatment for opioid addiction, but added that “the final cost for the Group may be materially higher than the amount provided”.
Reckitt Benckiser's share price was down at the time of writing by 1.93 per cent.
The results come following a busy period for RB, as the group is increasing its focus on health and hygiene.
It sold its food business last week, and completed the purchase of baby formula business Mead Johnson Nutrition earlier than expected in June.
RB said it is still targeting a full year like-for-like net revenue growth of two per cent, a goal which Kapoor said was “challenging”, having revised this down from three per cent earlier this year.
But Kapoor added:
There is no doubt that despite the operational issues RB is becoming a better, stronger company.
The strategic transformation enabled by the recent acquisition of Mead Johnson Nutrition and disposal of food will position RB well to deliver superior shareholder returns for years to come.