Colds and flu drive growth for Strepsils-maker Reckitt Benckiser - UPDATE

13th Feb 2013 07:09

Consumer products giant Reckitt Benckiser managed to narrowly beat consensus expectations with its 2012 results, as a strong performance in the Health & Hygiene division - responsible for brands such as Durex, Gaviscon and Dettol - helped drive growth. As such, the company said it is now bringing forward two medium-term key performance indicator (KPI) targets to 2015, a year earlier than planned.Net revenue in the 12 months to December 31st totalled £9,567m, up 1.0% from £9,485m in 2011. The consensus estimate was for a flat reading year-on-year. Meanwhile, group like-for-like (LFL) revenue rose by 5.0% (consensus: +4.3%) which the firm said was well ahead of its market growth. The Health & Hygiene divisions, which together accounted for 69% of core net revenue in the fourth quarter, both delivered LFL growth of 6.0%. The Health unit in particular was helped by higher bouts of cold and flu in the fourth quarter, which boosted sales of seasonal brands Mucinex and Strepsils.Results were also driven by the LAPAC (Latin America, Pacific and Asian countries) and RUMEA (Russia, the Middle East and Africa) regions and an improved result from (ENA) Europe and North America in spite of "challenging market conditions".Profit before tax in 2012 totalled £2,420m, up from £2,376m previously, while adjusted earnings per share (EPS) rose 247.1p to 264.4p, some 6.0% ahead of consensus forecasts. The company raised its final dividend per share (DPS) by 11% to 78p, bringing the total 2012 dividend to 134p, up 7.0% on 2011. Net debt rose from £1,795m to £2,426m over the period, reflecting the payment of dividend and acquisitions.Looking aheadThe firm's medium-term target for Health and Hygiene to be 72% of core net revenues has now been brought forward to 2015, from 2016 previously.The contribution of LAPAC and RUMEA revenues to group revenues is expected to rise to 50% by 2015 also, also a year earlier than planned.As for 2013, the firm is expecting net revenue growth of 5-6% at constant currency rates, up from 4.0% growth in 2012."While much has yet to be done and markets remain challenging, we approach 2013 with the confidence that we have the right strategic focus, the right organisation and culture, and with the right innovation platforms," said Chief Executive Rakesh Kapoor."Strong momentum"Nomura maintained its 'buy' recommendation for Reckitt on Wednesday, saying that the company has "strong momentum" going into 2013."We expect consensus estimates for 2013 to be revised up by c4.0% this morning, reflecting RB's stronger-than-anticipated finish to the year and upbeat outlook," the broker said.Shares were up 1.67% at 4,436p by 14:52 in afternoon trade.