Reckitt slides after profit misses target

RECKITT Benckiser shares took a hit yesterday after the company’s fourth-quarter profit rose but fell short of forecasts.

Shares in the maker of Dettol and Cillit Bang closed 5.1 per cent lower at 3,270p after it said net revenue rose ten per cent to £2.28bn, and like-for-like sales climbed five per cent.

Pre-tax profit fell 1.6 per cent to £597m, because of one-off costs linked to the takeover of Durex condom-maker SSL. Excluding the SSL costs, earnings per share rose 14 per cent to 69p, which came in below analysts’ consensus of around 73p.

Reckitt chief executive Bart Becht said: “We’ve delivered the growth that we promised while the market’s growth was declining.”

He said “heavy price promotions” on dishwasher and laundry products in Europe were hurting sales and profit growth in the region.

Reckitt makes Finish dishwasher powder and Vanish stain remover.

Becht claimed that rivals Unilever and Procter & Gamble were using massive discounting to stimulate sales, adding: “We don’t believe that is the way to deliver consumer benefits.”

Reckitt, like its rivals, has been hit with the rising cost of materials like oil, which is used to make plastic bottles and palm oil which is used in soap.

But Reckitt forecast a 10 per cent rise in net profit and revenue growth of 12 per cent in 2011, despite its profit-making heroin substitute Suboxone having lost its patent.