SHARES in Reckitt Benckiser climbed higher yesterday after the maker of Finish dishwasher tablets and Nurofen painkillers said strong emerging markets growth helped push third quarter like-for-like sales up by five per cent.
Chief executive Rakesh Kapoor said the group had seen an “excellent” performance from emerging markets, and an improved performance in Europe and North America.
The growth beat analyst expectations of around 3.8 per cent and sent shares up by six per cent to hit their highest level since the group was created in 1999.
“The key area of beat was in the Europe North America (ENA) region, which suggests to us that chief executive Rakesh Kapoor’s initiatives are beginning to bear fruit in Reckitt’s most challenging region,” Martin Deboo, analyst at Investec said.
Like-for-like revenue rose two per cent in Europe and North America, which contribute over half of its business, as increased marketing spend on laundry detergents and efforts to strengthen the Vanish brand started to pay off.
Sales increased by 11 per cent in Reckitt’s Latin America and Asia Pacific region where Dettol, Harpic and Durex grew strongly. Russia, the Middle East and Africa grew sales by seven per cent.
Meanwhile its pharmaceuticals division rose six per cent in the quarter.
Reckitt said it was on track to meet its 2012 goals, with market growth now expected to be at the upper end of its one to two per cent range.
The company is targeting underlying sales growth 200 basis points ahead of its market growth – a three to four per cent increase.