Reckitt: Durex maker’s sales swell as price hikes offset volume slump
Durex-maker Reckitt Benckiser said ramping up its prices had helped soften the blow of a volume slowdown in the first half of the year as it topped analyst expectations.
Reckitt, which also owns Cillit Bang and Dettol among other brands, posted a pretax profit of £1.64bn for the first half of the year, down from £1.69 in the same period last year.
The slowdown came despite like-for-like revenue rising 4.1 per cent on a constant-currency basis, ahead of the 3.7 per cent growth analysts had expected in a company-supplied poll.
Slough-based Reckitt said its gross margin improved by 130bps to 59.4 per cent with the impact of rampant inflation wiped away by “carry over pricing, mix benefits and further productivity efficiencies.”
Bosses are now expecting to maintain group net revenue growth target of 3-5 per cent in 2023 and adjusted operating margins to be slightly above 2022 levels.
Outgoing chief Nicandro Durante said this morning it had been a “strong first-half performance” across the firm’s business units.
“We delivered like-for-like net revenue growth of six per cent, drove gross margin expansion and increased brand investment (by around £100m) behind our innovation programme,” he said.
“Amidst a backdrop of challenging market conditions and uncertainty, the business has strong momentum, yet with an opportunity to further strengthen our execution, optimise our cost base, and deliver improved returns to shareholders,” he added.
Kris Licht is set to take over the reins from Durante after being appointed earlier this year.